Obama’s “Failed” Economic Policies

I am fascinated by the way many Republicans seem convinced that Obama’s “failed” economic policies are somehow to blame for the slow recovery, while at the same time they seem largely unable to enunciate what precisely those failed policies are.

Well, that is not quite true. They will often cite the over-regulation, deficits, and loose money as the key problems, but they seem wholly unable to explain, using actual data, how these have depressed the economy.

The argument about regulatory uncertainty is both the easiest issue to explore and the least convincing. According to Republicans, Obama’s “anti-business,” pro-regulation attitude is discouraging investment. The “job creators” faced with regulatory uncertainty are sitting on the sidelines. Well, there are a few problems with this perspective.

This post is full of charts and will remind you, I fear, of Matt Yglesias. If that bothers you, please read no further.

First, the regulatory argument makes little sense logically. Absent some guaranteed permanent GOP majority, there will always be some regulatory uncertainty. If the “job creators” will only invest when they are absolutely certain not to face regulatory hurdles in the future, then they will never invest. Even if Romney wins in 2012, they would still need to fear the return of an “anti-business” Democrat in 2016. After all, according to this argument, the “job creators” have been sitting on the sidelines for the past four years already. If regulatory risk is that severe, and investors are are risk averse as this theory proposes, then recovery will never occur. Further it is difficult to understand how economic growth could ever occur if this line of argumentation were plausible. Happily, it isn’t as a general rule.

Second, while I am willing to accept the notion that in theory regulatory uncertainty may deter some new investments, the empirical record is problematic in this particular case. Quick, which three economic sectors seem most uncertain with regard to future regulation? Health care, energy, and the financial sector. I mean, that is pretty obvious, no? These are the three areas where we’ve seen both the most action and discussion of the need for additional regulation. So if regulatory uncertainty is a key factor driving the slow recovery, then these sectors should be lagging behind the rest of the economy. Are they?

Well, employment in the energy sector is booming (the red line), despite EPA activism on carbon emissions. Health care employment is growing on the same trendline since before the recession began and seems completely unaffected by Obamacare (the blue line). Financial sector employment (orange line) is lagging total non-farm employment (green line) by a relatively small amount, but then again, wages are higher in that sector and have been growing faster than wages in the rest of the economy. The graph below just shows rates of change, not absolute compensation.

I mean, I am willing to consider the regulatory uncertainty argument. But it seems to me the data just isn’t really compelling. The main areas of new government regulation include one boom sector (energy), one sector which is growing faster than the rest of the economy (health care), and one that is lagging slightly in employment numbers, but surging terms of compensation (finance).

An alternative theory focuses on Obama’s high deficits. And they are indeed high. But how would that be likely to slow economic growth? Well, one response is basically the confidence fairy concern. High deficits make “job creators” uncertain about the future, so again, being risk averse, they are unwilling to invest. And maybe there is something to that, though Romney’s case would be stronger if he were not proposing even higher deficits. But the bigger problem with this argument is that it is hard to test. I mean, how would we know this was occurring?

A more conventional critique of high deficits is the “crowding out” hypothesis which claims that government deficits suck so much money out of the private sector that it “crowds out” private investment. But the mechanism by which this slows economic growth is high interest rates. There is only so much money out there. If the government borrows more, that leaves less available to private investors. Supply of money is fixed in this scenario, demand for money increases due to government borrowing, so the cost of money should rise. The cost of money is, of course, the interest rate. Are they high and rising under Obama?

So, um, no. Mortgage rates –the blue line — are low. 10 year treasuries are low. But feel free to log into FRED and check other interest rates. Commercial paper is paying low rates. Basically, there is zero evidence that I can see for the crowding out hypothesis.

Then you have the “loose money” argument. This is a weird one to pin on Obama since managing the money supply is more of a Fed matter. But it is true that the money supply has increased dramatically, and will continue to increase due to quantitative easing. Romney has called this a “sugar high.” But why? When the Fed engages in quantitative easing, it basically prints money and uses that money to buy assets — treasury bills, mortgage-backed securities, etc. So, now the Fed owns a bunch of assets, and the former owners hold a bunch of cash. The Fed hopes this will encourage them to lend more, spurring economic activity. The risk, and it is a real risk, is that having more money in circulation chasing the same amount of goods will cause inflation.

Now, the linkage between inflation and reduced economic growth is sketchy. Some inflation is actually good for economic growth since it discourages people from sitting on cash, and instead encourages them to invest the money in ventures that may have a better rate of return than dollar bills metaphorically sitting in a mattress. But, if inflation is too high, uncertainty abounds and people instead look to move money off-shore into more stable currencies. So loose money risks inflation and currency devaluation. Are we seeing either?

So the consumer price index has risen since 2009, when we were looking at actual deflation, but remains low by historical standards. And in terms of exchange rates:

Okay, so I guess there is some decline here of the dollar vs. other major currencies. And this is understated because of Eurozone problems. But interestingly enough this should cut both ways. A weaker dollar may be an indicator of people selling dollars and buying other currencies, but the effect of this ought to be (a) an increase in the cost of imports (which should manifest in inflation) and (b) greater competitiveness of U.S. good abroad (which, if anything, should encourage economic growth).

That said, if you squint real hard and want to rest a lot on inferences drawn from relatively minor changes in the strength of the dollar, then perhaps there is a story about Obama’s economic policies you can spin. But it isn’t very compelling or very clear.

But in reality, I am just wasting everyone’s time. The Republicans don’t actually have an economic argument to make about Obama’s policies. Obama’s great sin isn’t regulation or deficits or loose money. His great sin in GOP eyes is simply GWB. No, not the former president, but rather the acronym. Obama’s problem is Governing While Black, which is why Romney thinks that by doing nothing, just by being his own fabulous self, economic growth will return if he is elected.

 

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149 replies
  1. 1
    Raven says:

    “But in reality, I am just wasting everyone’s time.”

    Well, I would have never said that.

  2. 2
    jibeaux says:

    This post is full of charts and will remind you, I fear, of Matt Yglesias.

    Spelling is better.

    It’s cute, though, how liberals are so desperate for a legitimate opposition party with legitimate arguments that we’ll actually craft them ourselves. It’s like our version of Clint’s routine.

  3. 3
    Ash Can says:

    I’m not sure if his greatest sin in the eyes of the GOP is GWB or GWD. I’m inclined to think it’s the latter, with an enormous assist from the former.

  4. 4
    Comrade Mary says:

    /anoints Bernard as this blog’s Explainer-in-Chief

    I like charts. All hail Tufte!

  5. 5
    General Stuck says:

    True story anecdote. When I was a compulsive C Span junkie watching every minute I could of House and Senate goings on, one day I tuned into the very first House session after dems took over in Jan. 2007.

    Not a single hesitation from the House wingnuts, instantly erasing from their memory banks everything that had happened under their former hero GWB. They just dusted off the eternal minority GOP handbook of tried and true memes, and commenced from the get go on the evils of tax and spend liberals running up the debt, giving your shit away to slackers disguised as the poor. And haven’t missed a beat since. They run on preprogramed smear and there is a message of collectivist schemes in every bottle that washes ashore, fitting the circumstance. You just pop the cork and out comes the bullshit.

  6. 6

    Nice post. Yep, zero empirical evidence on this one. I linked to studies from Jan Eberly, Bruce Bartett, & Lawrence Mishel awhile back; all of them looked at data in various ways, including volume of regulations and cross-county comparisons, and found zero evidence for the “regulatory uncertainty” argument.

    Bartlett explained, “regulatory uncertainty is a canard invented by Republicans that allows them to use current economic problems to pursue an agenda supported by the business community year in and year out. In other words, it is a simple case of political opportunism, not a serious effort to deal with high unemployment.”

  7. 7
    barath says:

    There’s a more broad-based reason why the economy is struggling, and indeed will probably struggle under any president from here on out except for brief spurts of growth: we’ve tapped what there is to tap on a finite planet.

    What’s driven growth over the past few centuries? If you drill down into it, it’s the conversion of non-monetary services and common goods into monetary services and private goods. That is, things people do for each other for free and natural resources are turned into profit.

    Whenever the IMF goes into some “developing” nation and tells them to restructure their economy, it’s usually to move them towards monetizing their activities: instead of growing their own food, they should grow export crops they don’t need and sell them; instead of building their own homes and clothes, they should go off to factories; instead of caring for each others’ kids in a community, they should set up day-care centers; instead of using the land’s resources slowly and carefully, they should lease it to multi-national oil/timber/coal/etc. companies for extraction, etc.

    This has been true everywhere, but we’re running out of places and things to tap into (e.g. fossil fuels aren’t as easy to come by, and what there is has massive environmental consequences), and so what’s left for us to squeeze for growth?

    Anyway, it seems that this overarching issue gets ignored too often by economic commentators…

  8. 8
    gene108 says:

    The argument about regulatory uncertainty

    I don’t think the the uncertainty argument is a myth or a figment of anyone’s imagination.

    In 2009, when businesses were scrambling to stay alive, the Democratic House pushed through some huge regulatory changes, such as HCR with a public option and cap-and-trade for carbon emissions.

    I think HCR needed to be done, whether or not the economy was doing well or bad.

    I think things like cap and trade for carbon emissions could’ve waited until the economy got better.

    This really did create a feeling – in a very stressful economic time businesses – that on top of figuring out how to survive, they would have to deal with a overwhelming new regulatory landscape.

    I’m not implying the new regulations would be costly for business or onerous, just that they are new and for example, when you are in a car accident and your car is spinning out of control, you don’t want to stop and think “where’s the break peddle at, since the new design [rules] moved it.”

    That’s the general vibe I got in 2009.

    Now that things have gotten better, it’d be a good time to revisit issues lack reducing carbon emissions.

  9. 9

    Forgot to mention, Krugman summarized AEI’s pitiful attemp to rebut Mishel’s data as “So’s Your Mother. Also, Reagan.”

    ETA: @gene108: But we’re talking here about *data*, not “a general vibe” I got three years ago. The larger problem all along, to quote Bruce Bartlett again: “It’s the aggregate demand, stupid”.

  10. 10
    1badbaba3 says:

    Facts, logic, intelligence. What are we, Vulcans?

  11. 11
    debbie says:

    while at the same time they seem largely unable to enunciate what precisely those failed policies are.

    Dr. Frank Lutz is again proving himself to be a hack. What is it they’re paying him for???

  12. 12
    mai naem says:

    I am out of patience with these fcukers. I hope BHO fcuks them up the ass with the baseball bat in November. I hope this is followed up by a heavy painful smack on the back of the head by Nancy Pelosi and a TKO by Harry Reid, he being a former boxer and all. The Repubs don’t give a crap about this country. They give a crap about their power and the very very wealthy. It’s highly offensive when I see Mitt paying less than 14 percent in taxes when I know people who are working their asses off going part time to college because they can’t make it otherwise. I know people who can’t afford the freaking bus fare to go to the doctor because it’s the end of the month and they’ve spent their social security money on non-essentials such as food,lodging and medications. And these GOP Pigs want to destroy social security and medicare too. Assholes.

  13. 13
    Bobby Thomson says:

    This post is full of charts and will remind you, I fear, of Matt Yglesias.

    I must have missed the douchey contrarian appeal on behalf of Republican policies.

  14. 14
    Schlemizel says:

    Not sure how many here remember 1992. The GOP was so focused on calling Clinton a failure that Dave Barry even made jokes about it. I think it was his column on inauguration day that he made the joke of always referring to it as “the failed Clinton Presidency”.

    Facts have no meaning to these people

  15. 15
    Mark S. says:

    Where’s Political Observer?

    Among likely voters, Obama is ahead of Romney in Ohio 52 percent to 44 percent. In Florida, the president leads 51 percent to 47 percent, a numerical but not statistically significant edge. Among all registered Florida voters, Obama is ahead by nine percentage points. The new numbers come one week after a Washington Post poll in Virginia showing showed Obama with a clear lead there.

    The race is basically tied, and did you see that Romney ad during that football game the other day? UNLIMITED CORPORATE CASH

  16. 16
    Raven says:

    @mai naem: Bernie Sanders is worried that Obama is going to fuck with SS after the election.

  17. 17
    wrb says:

    I’ve been witness to several instances in which rather than uncertainty, it was certainty that prevented investment- certainty that Republicans wanted to prevent recovery, and as long as they controlled the House, they could.
    Specifically, a multi-million dollar credit line for development was yanked after the debt ceiling fiasco. The investment banker said that after watching the Republicans in congress, his investors had decided to bet against the US economy.

  18. 18
    spongeworthy says:

    You had put together a fairly compelling case that you squandered here: Obama’s problem is Governing While Black…

    You guys don’t seem to remember how much we squealed at Clinton. Not quite like you hounded Dubya, but still. And Clinton’s whiter than I am.

    Look, everybody knows the debt is not sustainable. Obama had 4 years to propose some kind of resolution to the saqueeze that’s coming. He didn’t.

    The bill’s coming due and all of us here know what the first proposal from your side is going to be–higher taxes on earners and corporations. Until that hammer falls, it remains the very definition of uncertainty. Not that you’ll be sticking us with the bill, but whether you’ll assume “Hey, problem solved!” and walk away with a smug look on your faces.

    Higher taxes on corpoartions and earners won’t begin to fix out problems. We need real reform before we can expect people to plan for other than a meltdown.

  19. 19
    Culture of Truth says:

    @Schlemizel: Oh I remember. There were calls for impeachment during the inaugural ceremony.

    And no, I’m not making that up.

  20. 20
    Chyron HR says:

    @spongeworthy:

    Did you ever manage to come up with an explanation for how calling the POTUS “NigObama” has nothing to do with his race? Or are you still in denial over that?

  21. 21
    eyelessgame says:

    Their latest argument isn’t regulatory uncertainty. According to my conservative facebook friends, there is actually higher inflation than the official numbers, because the official numbers don’t take into account energy or food prices, and those have gone up, and that’s what’s making the economy bad.

    Implicit in this is that it’s Obama’s fault (of course the reason food/energy are excluded is that those prices tend to move independent of fiscal and budget policy, and they fluctuate a lot and if they’re up, don’t worry about it, because when the weather improves or whoever’s currently waving around their dick in the middle east gets bored, prices will come back down.)

    The data doesn’t support those being much of a drag on the economy anyway, and even if they are, neither the weather nor Netanyahu are Obama’s fault.

  22. 22
    Culture of Truth says:

    ‘Uncertainty’ is a phrase without meaning. Ask a Republican if they would be happy with a Constitutional Amendment fixing the corporate tax at 50%.

    When a Republican says “we need to get rid of uncertainty” they mean “we need to enact Republican policies”. Which is fine, but cut the nonsense.

  23. 23
    gene108 says:

    @spongeworthy:

    higher taxes on earners and corporations

    The U.S. is the richest country in the world.

    If, as you suggest, the government is broke the problem isn’t because there isn’t money in this country to fund the government, it’s because the government has chosen not to collect it in the form of taxes.

    For example, capital gains taxes have historically been higher:

    From 1913 to 1921, capital gains were taxed at ordinary rates, initially up to a maximum rate of 7 percent.[2] In 1921 the Revenue Act of 1921 was introduced, allowing a tax rate of 12.5 percent gain for assets held at least two years.[2] From 1934 to 1941, taxpayers could exclude percentages of gains that varied with the holding period: 20, 40, 60, and 70 percent of gains were excluded on assets held 1, 2, 5, and 10 years, respectively.[2] Beginning in 1942, taxpayers could exclude 50 percent of capital gains on assets held at least six months or elect a 25 percent alternative tax rate if their ordinary tax rate exceeded 50 percent.[2] Capital gains tax rates were significantly increased in the 1969 and 1976 Tax Reform Acts.[2] In 1978, Congress reduced capital gains tax rates by eliminating the minimum tax on excluded gains and increasing the exclusion to 60 percent, thereby reducing the maximum rate to 28 percent.[2] The 1981 tax rate reductions further reduced capital gains rates to a maximum of 20 percent.

    http://en.wikipedia.org/wiki/C.....ted_States

    But somehow the U.S. managed to create jobs in the 1950’s and 1960’s.

    Raising them again will help raise revenue, without having a material impact on most Americans.

  24. 24
    Dennis SGMM says:

    Their critiques of Obama’s economic policy are just like their opposition to gay marriage:

    Because shut up is why!

  25. 25
    catclub says:

    @Comrade Mary: Well, the charts might get some complaints from the Tufte in me.
    The colors of the lines should be matched with names, not long numerical strings, so you have to go back and forth from the lower right labels to the title to figure out what is what.

    But charts that are relatively accurate are far better than no charts.

  26. 26
    Schlemizel says:

    @Culture of Truth:
    The foul mouthed Dick (Armey) stated in an interview in Dec before he was installed in the WH “WHEN we impeach Clinton”

  27. 27
    weaselone says:

    An alternative theory focuses on Obama’s high deficits.

    Even if the deficits were a problem, which they will most certainly be in the future, Obama’s policies aren’t the major contributors. The huge scale of the deficits are largely a combination of the massive structural deficit that existed prior to his taking office coupled with recession induced tax revenue decline and spending increases from automatic stabilizers.

    Of course, Republicans don’t really care about the deficit. Exhibit 1: The Bush Administration. Exhibit 2: First Order of business under a President Romney, more tax cuts.

  28. 28
    rlrr says:

    @weaselone:

    First Order of business under a President Romney, more tax cuts.

    And war with Iran.

  29. 29
    dmsilev says:

    @Mark S.:

    The race is basically tied, and did you see that Romney ad during that football game the other day?

    I fully expect to learn that Romney came up with the idea to hire scab referees.

  30. 30
    catclub says:

    @debbie: “What is it they’re paying him for???”

    For the fact that we are wasting time with the themes he has come up with. Rather than things that we observe are important. Incarceration nation? Not interested.
    Children in poverty? Not interested. Global climate change?
    Not interested.

    Deficits? Attention must be paid.

  31. 31
    Culture of Truth says:

    Romney will open a window to Iran.

  32. 32
    aimai says:

    @gene108:

    If people want to make money in business maybe they have to work for it? Hire a few more lawyers to figure out what the new regs say? Hire a few more workers to carry out new mandates? In that sense regulatory uncertainity, or new regs, are always a boost to the economy. More people get employed means more money going into the economy and circulating. People with capital to invest should have to invest a lot to make their profit.

    To the extent that the government should try to increase employment, general welfare, and productivity in society it isn’t capital and its need for profits that should be encouraged it is capital’s need to invest and spend that should be encouraged.

    aimai

  33. 33
    PurpleGirl says:

    @spongeworthy: Please define “earners”. Do you include the administrative assistant who makes $50,000 a year or retail clerk who makes $20,000 or just the boss who makes $300,000 (and a bonus of $1 Million)?

  34. 34
    Culture of Truth says:

    Third order of business: raise taxes on the poor

  35. 35
    hep kitty says:

    Here is Reince trashing the President for being on The View and for letting Hillary Clinton do her job. Hmm, who else was on The View? Who insulted our allies and should not come 20 feet within foreign policy?

    http://rncresearch.tumblr.com/.....presidency

    Boy oh boy, they sure loves them some Hillary these days.

  36. 36
    Rafer Janders says:

    The argument about regulatory uncertainty is both the easiest issue to explore and the least convincing. According to Republicans, Obama’s “anti-business,” pro-regulation attitude is discouraging investment. The “job creators” faced with regulatory uncertainty are sitting on the sidelines.

    Re uncertainty, I’d like these people to let me know at what magic point in the past they actually had certainty about the future?

    Did they have certainty during, say, the 2005-2007 credit boom under Bush? Well, anyone making an investment decision with certainty then would have walked headlong into the buzzsaw of the Great Recession.

  37. 37
    Forum Transmitted Disease says:

    What “over-regulation”? Seriously. I’m not seeing it. More the opposite if anything.

  38. 38
    Culture of Truth says:

    Speaking of Bill Clinton:

    Former President Bill Clinton introduced Romney before Romney’s speech Tuesday to Clinton’s annual global conference in New York and praised Romney’s support for the AmeriCorps program.

    Romney joked that if there’s one thing he’s learned, it’s that, quote, “a few words from Bill Clinton can do a man a lot of good.”

    Romney’s campaign says he spoke backstage with Clinton and Clinton’s daughter, Chelsea, before delivering his speech. Clinton and Romney appeared chummy as they shook hands and chatted onstage afterward.

  39. 39
    Ronzoni Rigatoni says:

    I think most folx who are paying att’n have a handle on it. As Charlie Pierce puts it, “Fk the deficit. People got no money. People got no jobs.” Krugman et al., have been pointing out for years that the problem is a lack of demand. Atrios has also been sayin’ that the FED is giving the money to the wrong people (banks?). Frankly, FDR had it right in ’33. If the private sector can’t or won’t create jobs, then the gummint has to do it (WPA, CCC, etc.). Put all that goddam money where it belongs. Business can’t invest in any kind of expansion without paying customers (Hello, Paul Samuelson and Econ. 101 from about 100 years ago LOL).

    But what the hell do I know?

  40. 40
    Paul says:

    @Rafer Janders:

    Amen. If you don’t think you can run a business with any type of uncertainty, you shouldn’t run a business. The shareholders should find a different CEO who actually knows how to run a business.

    It seems like today’s GOP has become the party for apologizing for incompetent CEO’s.

  41. 41
    hep kitty says:

    S T O P IT. THISISHARD.

  42. 42
    gene108 says:

    @aimai:

    If people want to make money in business maybe they have to work for it? Hire a few more lawyers to figure out what the new regs say? Hire a few more workers to carry out new mandates?

    I didn’t say new regs were an inherent problem. The timing of what the Pelosi led House did with passing a bunch of regulatory reforms was bad.

    The Obama Administration and the Democrats grossly underestimated the severity of the recession/near depression that was underway in 2009. It wasn’t the right time to rewrite the rules, with the exception of HCR because that’s been a mess for too long.

    I really think of it like your in some kind of accident/emergency and the ‘x’ gadget that you always use to deal with it has been moved, while you were having this emergency. The move may be more ergonomic, but when you kitchen’s on fire you don’t want to stop and think about where the fire extinguisher just got moved.

    That’s all I’m trying to say. The timing of pushing for all those changes really wasn’t good.

    There really was a “are these guys seriously trying to rewrite the rules of how we do business, when my business and the economy is going under” vibe back then and I think some of it was understandable.

    If the Dems get back the House and change the rules for the filibuster in the Senate, I think some cap and trade for carbon emissions wouldn’t be a bad thing.

    Businesses are healthy again.

  43. 43
    Tone in DC says:

    @mai naem:

    Damn straight.

  44. 44
    Daulnay says:

    Bernard:

    First, the regulatory argument makes little sense logically. Absent some guaranteed permanent GOP majority, there will always be some regulatory uncertainty. If the “job creators” will only invest when they are absolutely certain not to face regulatory hurdles in the future, then they will never invest.

    I’m disappointed to see the Repubs best argument dismissed by misrepresenting it with a false dilemma. The argument is not that the monied will only invest when they are absolutely certain not to face future regulations. Rather, it’s that the uncertainty and expectation that the regulatory regime will change significantly is causing them to wait until things are more certain. No one, except perhaps you, argues that they are looking for absolute certainty.

    There are other, very good, arguments that counter this Republican argument. In addition, those other arguments shed light on the economic situation, and point to a solution. Your treatment of this issue robs us of the knowledge (for the ignorant) and a tool for convincing others. And false dilemmas are a cheat of an argument, you are usually better than that.

  45. 45
    Ben Grimm says:

    @spongeworthy:

    Seriously? The Dems hounded Bush worse than the GOP hounded Clinton? They impeached Clinton. Over a hummer. Oh, sorry, over lying about a hummer.

  46. 46
    hep kitty says:

    According to the speakers at the RNC convention, starting your own small business is the answer to every problem, including having a sick kid. Never mind that those preaching took out gov’t loans to start their businesses.

    Everyone should start their own business (with their own money I guess, either that or take out a gov’t loan and lie about it) if they wish to be worthy of existing. Anyone who doesn’t is just another one of those parasites.

  47. 47
    Ash Can says:

    @spongeworthy: You know, I do agree with you on the GWB thing, as I said above. I do believe it’s just a knee-jerk GWD issue first and foremost — although to deny that GWB doesn’t enter the picture at all is laughable denial.

    But then, the rest of your post does indicate that you’re heavily into denial. I might listen to your points regarding the deficit if they weren’t buried under a mountain of empirical evidence supporting Dick Cheney’s very own statement that “deficits don’t matter” — at least, not the way you say they do. As such, it shows your points to be utterly unserious. Go brush up on your macroeconomics and come back when you figure things out a little better.

    And PS: Yes, we’ll complain loud and long about a president, Dem or GOP, who gets thousands and thousands of Americans — and untold thousands of people abroad — killed for no good reason. A former president who’s quite literally wanted in multiple countries — and not just Iran and The People’s Republic of West Grandstandistan — for war crimes is not someone to be proud of. The fact that you’ll defend all this over someone lying to get a blow job shows just how profoundly FUBAR your thinking is.

    ETA to everyone else. Yes, I know I’m feeding the troll. Sometimes I’m just not in the mood to let bullshit slide.

  48. 48
    hep kitty says:

    @spongeworthy: Sponges are a real beyotch to use and also extremely uncomfortable. I’ll stop right there, but I have to question if your alias is accurate. :)

  49. 49
    Daulnay says:

    @gene108:

    The Obama Administration and the Democrats grossly underestimated the severity of the recession/near depression that was underway in 2009.

    Very few people had a good grip on the severity of the near depression, notably Paul Krugman. It’s unfair to point at Obama and the Dems — the Republicans certainly didn’t, and most businessmen didn’t. Those latter groups were vehemently opposed to any major action to ameliorate the problem. Politically, the DLC Democrats lined up with Republicans on this issue, making it impossible for the Obama administration to pass as much stimulus as they wanted.

    The Obama administration settled for less than it wanted — it initially tried to get more stimulus spending than it eventually did, with Repubs fighting it all the way. If anyone’s to blame, it’s the deficit scaremongers in the pundit class and the Republican party.

  50. 50
    JohnnyMac says:

    Anyone worried about regulatory uncertainty should watch one of these ‘non-regulated’ NFL games to see how important good regulation is.

  51. 51
    Bernard Finel says:

    @Daulnay: You are misrepresenting my view. I stated the more extreme version of the argument first, but then I went into a more detailed consideration showing that those sectors more threatened with regulatory uncertainty were also among those doing better than the economy as a whole. My take on this is moe nuanced and data-driven than you are acknowledging.

  52. 52
    Bernard Finel says:

    @Daulnay: You are misrepresenting my view. I stated the more extreme version of the argument first, but then I went into a more detailed consideration showing that those sectors more threatened with regulatory uncertainty were also among those doing better than the economy as a whole. My take on this is moe nuanced and data-driven than you are acknowledging.

  53. 53
    Belafon (formerly anonevent) says:

    @spongeworthy:

    The bill’s coming due

    Because we know a Democrat will pay it when a Republican won’t? Is that why it’s only a problem when a Democrat is in charge? Cause Republicans sure don’t seem to give a damn about the bill when they are running things. They buy the big toys and tell everyone “deficits don’t matter.”

    Sounds like the country needs to divorce the Republicans.

  54. 54
    catclub says:

    @gene108: “There really was a “are these guys seriously trying to rewrite the rules of how we do business, when my business and the economy is going under” vibe back then”

    That sounds a lot more like the vibe that inflation is just around the corner, hence we cannot have any stimulus, than any actual facts. Have regulations gone up under Obama?
    How much? Have the most regulated fields been affected?
    Like healthcare, financial? Have these industries been particularly penalized over the past 4 years? How can we tell, by the fact that their profits are up?

    Pierce is right on why businesses are not hiring.
    Fuck the deficit, people got no jobs, people got no money.

  55. 55
    Belafon (formerly anonevent) says:

    @Ash Can:

    You know, I do agree with you on the GWB thing, as I said above. I do believe it’s just a knee-jerk GWD issue first and foremost—although to deny that GWB doesn’t enter the picture at all is laughable denial.

    I like so say that they don’t want any Democrat in the White House; race is just a weapon. We’d be talking about Clinton’s vagina/period/menopause/emotions if she were President. But spongy has to explain statements like “Don’t Re-Nig”. The racism is there.

  56. 56
    Kurzleg says:

    Good post, Bernard. The reason that GOPers don’t have a coherent, evidence-based argument is the same reason they’re lousy at governing. Analyzing the data helps you determine what, if anything, is to be done with regard to any given problem. The analysis defines the situation and shows you where you are. If you don’t bother to analyze the data, as the GOP does not, then you’re making decisions with a blindfold on. That’s about as accurate a metaphor as any to describe how the GOP operates.

  57. 57
    burnspbesq says:

    @gene108:

    Wait a sec. “Pushed through … Cap-and-trade?”

    In which parallel universe did that happen? Per Wikedia:

    The American Clean Energy and Security Act (H.R. 2454), a greenhouse gas cap-and-trade bill, was passed on June 26, 2009, in the House of Representatives by a vote of 219-212. The bill originated in the House Energy and Commerce Committee and was introduced by Representatives Henry A. Waxman and Edward J. Markey.[111] Although cap and trade also gained a significant foothold in the Senate via the efforts of Republican Lindsey Graham, Independent Democrat Joe Lieberman, and Democrat John Kerry,[112] the legislation was ultimately abandoned due to a confluence of political factors.[113]

    http://en.wikipedia.org/wiki/Emissions_trading

  58. 58
    1badbaba3 says:

    @gene108: So how did they get healthy again with all those untimely regulations?

  59. 59

    Charts? Facts? Data? How droll and bourgeois! Tell us more about how you feel…

    BTW, this is more like an Ezra post than an Yglesias post. (In a good way).

    Some inflation is actually good for economic growth since it discourages people from sitting on cash, and instead encourages them to invest the money in ventures that may have a better rate of return than dollar bills metaphorically sitting in a mattress.

    Of all your points, this is the one I wish could get more traction out there. Much of the middle class, informed by memories of the 1970s, has been so trained to fear ANY inflation that it needlessly restricts our options.

    But this isn’t the 1970s, so what held true then doesn’t necessarily hold true now. And while it’s unpopular to say out loud, there’s really no particular reason to favor ‘savers’ over anyone else (IMO it’s just another instance of residual Calvinism still having an effect in US culture).

    As far as ‘regulatory uncertainly’ is concerned, the GOP is more to blame for our current chaos than the Dems. Democrats would be quite happy to give them “regulatory certainty”. How about we go back to the regulatory regime of, say, circa 1997 or so? Certain enough for you, MOTU?

  60. 60
    Villago Delenda Est says:

    @Ash Can:

    This.

    Rethuglicans seem to believe, since 1980, that the White House is THEIRS. Any Democrat who holds it is by definition an usurper, is illegitimate. The election that placed him in office had to be fraudulent. The GWB part helps motivate the base, but the primary problem is GWD.

    The Rethuglicans are royalists now.

  61. 61
    Bokonon says:

    Can I propose an alternative theory of what’s going on?

    Millions and millions of businessmen listen to Rush Limbaugh and other conservative talk radio personalities on a daily basis. They hear a relentless drumbeat of bad news about impending doom, impending currency collapses and hyper-inflation, tax increases around every corner, tripling of the national debt, out-of-control bureaucrats, feminazis waiting to pounce and file lawsuits against their employers, etc. The talk and anecdotes exchanged in this closed system becomes more “real” than the hard data. And this becomes both a feedback loop and the emotional underpinning of a significant piece of Corporate America’s daily business decisions. And the listeners go out and keep shorting the economy. Small wonder.

    Yes, there are real problems with the economy, and YES – new regulations cause uncertainty, and can be a drag on business (I deal with this on a daily basis). I am no particular fan of big government. But there is a difference between being fact-based and being brainwashed, and trading in bad information.

  62. 62
    Sister Rail Gun of Warm Humanitarianism says:

    Romney thinks that by doing nothing, just by being his own fabulous self, economic growth will return if he is elected.

    Because he IS the Kwitsach Haderach confidence fairy!

  63. 63
    Ben Franklin says:

    @Culture of Truth:

    Romney will open a window to Iran

    It’s deja vu, all over again.

  64. 64
    Forum Transmitted Disease says:

    There’s a more broad-based reason why the economy is struggling, and indeed will probably struggle under any president from here on out except for brief spurts of growth: we’ve tapped what there is to tap on a finite planet.

    @barath: Maybe 1 in 20 people is even willing to concede that this could be the issue. But this is the reality. I am very afraid for what happens when people start to realize that from here on out, economic activity really is a zero-sum game, where gains can only happen if someone else loses.

  65. 65
    Villago Delenda Est says:

    @hep kitty:

    No no no.

    You just borrow the money from your parents to start your small business.

    I mean, that’s how OvenMitt’s friend the Pizza King got started. Heck, it’s how The Donald got started. It’s really simple. Like selling some of your stock to finance your college education. This is all just common sense!

  66. 66
    rlrr says:

    @Villago Delenda Est:

    Rethuglicans seem to believe, since 1980, that the White House is THEIRS.

    Aided by the pundits who after Mondale’s defeat in 84 spent the next 8 years claiming it was impossible for a Democratic Presidential candidate to put together a win in the Electoral College. Clinton’s real sin was proving theses pundits wrong (who then revised their claims by saying only a southern Democrat could become President).

  67. 67
    Cassidy says:

    @Forum Transmitted Disease: I’m guessing something like this.

  68. 68
    Daulnay says:

    Re regulatory uncertainty:

    This article
    linked to by Reflectionephemeral lays out the real reason businesses are not investing, and evidence. As you probably guess, it’s inadequate demand. Business isn’t expanding because, although businesses are making reasonable profits and have capital, there is not enough demand for their products. Expected returns on new investment are very low right now, lower than the near-zero returns from investing in Treasuries. In other words, the uncertainty that is plaguing business is economic uncertainty, not regulatory uncertainty.

    Just to nitpick, Bruce Bartlett is not an economist, he’s a political flack who specializes in economic and business. He’s also one of the former Republicans who’ve displayed integrity over the last 12 years (he worked for Kemp and others).

  69. 69
    Paul says:

    @spongeworthy:

    Nice try. I was a Republican when Clinton was in office. We didn’t hound him at all as much as the current Obama derangement syndrome that seems to be in place.

    Hell, ask Secret Service regarding all the threats from ignorant racists or what have you that they have to deal with that Clinton and the SS didn’t have to deal with then.

    The Vince Foster thing or whatever else Clinton had to deal with doesn’t even compare to the idiotic birther issue. Hell, it got so bad that Obama even had to waste critical time to have a press conference showing his stupid birth certificate for these idiots.

    And you think Bush got hounded more than Obama. Which planet do you live on…

    Obama has tried to solve our deficit that Bush created. The Republican Congress was resolved from day 1 to defeat Obama rather than work for our country. When they learned to Obama was in favor of the deficit commission, the GOP immediately was against it. It is just stunning that you would blame Obama for not fixing the deficit when he has tried. A deficit, by the way, that was created by the GOP.

  70. 70

    If that bothers you, please read no further.

    Ha ha ha! Clearly you’re new here. It is a fine Balloon Juice tradition to bitch about being bothered. Of course it’s easier to skip the posts, but where’s the fun in that?

  71. 71
    Villago Delenda Est says:

    @rlrr:

    Clinton definitely pissed off David Broder, because he came to DC and “trashed the place”.

    The problem with Broder’s death was that it wasn’t one where his head rolls around in a wicker basket, because that asshole definitely did deserve such a fate.

  72. 72
    hep kitty says:

    @Villago Delenda Est: And then you can say “I built this! All by myself, I built it!”

  73. 73
    burnspbesq says:

    Noah Smith wins the intertubes.

    http://noahpinionblog.blogspot.....tiary.html

  74. 74
    Anya says:

    @Culture of Truth:

    Clinton and Romney appeared chummy as they shook hands and chatted onstage afterward.

    Did they expect Bill Clinton to act like alpha Plastic Regina George or something? WTF kinda reporting is that?

  75. 75
    Liberty60 says:

    @gene108: Have you ever run a business?
    Sorry if that sounds snarky, but as a midlevel manager I can attest that federal regulations concerning HCR are at the botom of a very long list of things that CEOs worry about.
    For example, just concerning healthcare- the “new rules and regulations” issued by Aetna or Blue Cross usually come in the form of a 100 page booklet, all of which involve increase dfees and reduced coverage;
    Not to mention the new rules and regulations issued by the bank for our line of credit, the uncertainty of what our competitors are offering, the new demands that clients are issuing, the changed landscape of office rents and liability insurance and auto fleet leasing and the dynamics of employee recruitment and retention and on and on.

    When I see people sniveling about how haaaard it is to comply with HCR, I have to wonder how these WATBs ever got a business up and running int he first place.

    Usually, they didn’t.

  76. 76
    hep kitty says:

    @Paul: To note that treatment of the President by republicans is way worse than their treatment of Clinton is, indeed, saying a lot.

    White trash still trumps black, after all.

    If ever there was a group of snotty, snobby, racist, classist elites, it’s the republican leadership.

    And yet, they are trying so hard to get the Honey Boo Boo mama vote. They want it bad.

    What ever happened to soccer moms?

  77. 77
    burnspbesq says:

    @Sister Rail Gun of Warm Humanitarianism:

    Wait. If Romney is the Confidence Fairy, and the Confidence Fairy has spent the last three years giving blowjobs to the Invisible Bond Vigilantes … EWWWW! Brain bleach, stat!

  78. 78
    Lurking Canadian says:

    The Republican/Serious Person concern about deficits would be more believable if every “plan” for “deficit reduction” didn’t start with a gigantic tax cut for billionaires.

    Typical Serious Person argument: Governments are just like families. They have to balance their budget every month. And everybody knows, the best thing to do when a family gets into financial trouble is for Dad to ask for a pay cut and Mom to switch from full-time to part-time work. There’s just no way to get out of a financial hole unless you first reduce your income. I mean, that’s just Common Sense.

  79. 79
    Daulnay says:

    @Bernard Finel:
    If your take was more nuanced, why did you lead with a clear false dilemma? You didn’t state the argument that you were actually exploring, and the ‘regulatory uncertainty’ argument does make sense logically if you don’t misstate it. Face it, you’re better than what you did here, feel shame.

    Furthermore, you didn’t point to the evidence that businesses are being held back mainly by a lack of demand, which is the key rebuttal to the ‘regulatory uncertainty’ argument, and the ‘deficits are too large’ argument.

  80. 80
    gene108 says:

    @burnspbesq:

    I said the House under Speaker Pelosi passed a bunch of bills.

    I never said they got out of the Senate or were signed into law.

    Reread what I wrote.

    The rapid succession of regulatory reforms passed by the House did spook businesses about what government dominated by Democrats would do.

    I’m just restating what was being said around me 3 years ago.

    The timing was off to push for reshaping regulations.

    In hindsight, the House should’ve focused on jobs bills and more jobs bills, but that’s neither here nor there and hindsight is always 20/20.

    I think the effects of regulatory uncertainty have been overblown. I think it’d be a good time to better regulate carbon emissions and push for renewable energy, if the Democrats retake the House and hold onto the Senate.

    @1badbaba3:

    As I stated above, for better or worse a lot of them didn’t get out of the Senate, so they aren’t law and didn’t impact how businesses operated.

  81. 81
    trnc says:

    Ever since the “uncertainty” excuse started going around, I’ve been amazed that the so-called job creators would let themselves be characterized as nervous nellies who wet their pants at every turn. What happened to the Captains of Industry? I’d like to see dems yell that loud and clear for awhile to see how repubs deal with that being thrown back in their faces. In the 1940s, U.S. business owners had to live with the realistic threat of large scale invasion. Now our business titans faint at the possibility that they might have to reduce carbon emissions. Lamest people in the world.

  82. 82
    Villago Delenda Est says:

    @Liberty60:

    Yup.

    The “bureaucratic barriers” that businesses face are, most likely, from other businesses.

    I worked for a small telephone company that had to appeal to the government to get the incumbent local exchange carrier (ILEC) to honor a contract. In court, the attorneys from the ILEC told the judge that their internal policy was more important than the contract they signed with the small local telephone company.

    The judge was not amused.

  83. 83
    Forum Transmitted Disease says:

    According to my conservative facebook friends, there is actually higher inflation than the official numbers, because the official numbers don’t take into account energy or food prices, and those have gone up, and that’s what’s making the economy bad.

    @eyelessgame: This is true. However, their lack of bitching when Nixon instituted the practice, followed by their decades of silence when Reagan, Bush I and then Bush II failed to stop this insane and stupid method of measuring inflation makes me take their bitching a lot less seriously than I might otherwise.

  84. 84
    Bobby Thomson says:

    @Raven: He’s not wrong. More and better Socialists.

  85. 85
    Paul says:

    @Liberty60:

    Not only that. The environment before ACA passed was extremely destructive for small businesses. I used to work for a small company and each year our bills for employees medical benefits skyrocketed. It got so bad that we lost contracts to foreign companies that didn’t have to worry about huge medical bills going up year.

    I find it amusing that we hear how ACA is going to be bad for business. Whoever claims that has never worked for a small business or they are just a partisan Republican.

  86. 86
    Villago Delenda Est says:

    @Forum Transmitted Disease:

    Likewise their casual acceptance of massive deficit spending during all those administrations, plus the fact that Clinton handed the deserting coward a surplus, which he promptly evaporated by giving tax cuts to his “base”, the parasite overclass.

  87. 87
    Mnemosyne says:

    @spongeworthy:

    It does crack me up how you guys are so nostalgic for the good ol’ days of Clinton but then tell us that if we go back to the Clinton tax rates, we’re DOOOOOMMMED! DDDDDDDOOOOOOOOOOMMMMEEEDDDD!

  88. 88
    Joey Maloney says:

    @catclub: So you’re saying we have an Attention to Deficit Disorder?

  89. 89
    Forum Transmitted Disease says:

    @Cassidy: Nice. A bit more melodramatic than what the reality of it will be, but yeah.

  90. 90
    gene108 says:

    @Liberty60:

    Have you ever run a business?

    As an owner, no. As a senior manager, yes.

    federal regulations concerning HCR are at the botom of a very long list of things that CEOs worry about.

    The CEO may not worry about it on daily basis, but he/she would be cognizant of the fact someone in HR will be digging through the 2,000 page bill and HHS utterances about how it will be implemented because it can effect how businesses operate.

    For example, in the original HCR bill everyone you hired to provide outside services to your business – cleaning lady, landscaper to cut the lawn, plumber one time to fix the toilet, etc. – had to be given a 1099.

    That would’ve overloaded accounting departments.

    HHS dropped the requirement.

    HCR also requires non-grandfathered plans to charge employees no more than 50% of the premium. That can have a material impact on a lot of business, especially those that have low margins and off-set more than 50% of the cost to employees.

    How will that impact shopping for a new plan in the future? I don’t know.

    the “new rules and regulations” issued by Aetna or Blue Cross usually come in the form of a 100 page booklet, all of which involve increase dfees and reduced coverage

    Having shopped our benefits for the past 14 years, higher fees and reduced benefits are just what businesses have to do to be able to afford coverage to give to employees.

    The biggest issue I have with HCR is it doubles down on employer sponsored coverage.

    I’d prefer a system that’d make it so everyone can get their own policy and not have it be a cost to employers anymore.

  91. 91
    Forum Transmitted Disease says:

    For example, in the original HCR bill everyone you hired to provide outside services to your business – cleaning lady, landscaper to cut the lawn, plumber one time to fix the toilet, etc. – had to be given a 1099.
    __
    That would’ve overloaded accounting departments.

    What? You have to do this anyway if you pay them over $600 in a calendar year. So far our accounting department has held up just fine under the “overload”.

  92. 92
    Paul says:

    @gene108:

    The biggest issue I have with HCR is it doubles down on employer sponsored coverage. I’d prefer a system that’d make it so everyone can get their own policy and not have it be a cost to employers anymore.

    While I agree with your last sentence, I still think ACA is a huge improvement to small businesses. I have seen first hand how destructive the environment was prior to ACA.

  93. 93
    Hoodie says:

    @Daulnay: The regulatory uncertainty argument makes no sense as evidence of “Obama’s failed policies.” Stated another way, “regulatory uncertainty” means “hey, I may get my way if Republicans get back into office, that makes me uncertain.” That’s got nothing to do with Obama’s policies, because Obama’s policies regarding regulation are well spelled out and not at all uncertain. There is no uncertainty on the Republican side either,except to the extent that, while they generally say they’re against regulation, they don’t specifically spell out what they would do. The only uncertainty is on the part of which will prevail in the election and thereafter. That’s not Obama’s fault; they know what he wants to do, they just don’t like it. While you’re correct about demand, giving Bernard crap about what’s supposed to be the “key” argument is silly. They are both valid points.

  94. 94
    Culture of Truth says:

    Why don’t these businesses take personal responsibility for their failure to thrive?

  95. 95
    Ash Can says:

    @burnspbesq: OMG. A lot of that went over my cabbage-y little head, and even so, I sprained three ribs laughing. hee hee ow

  96. 96
    hep kitty says:

    Oh well, here’s the President apologizing to our enemies again.

    (sigh)

  97. 97

    @Mnemosyne:
    I never understood the fear, either: Many of us remember things being pretty damned awesome under the Clinton Tax Rates. What good have the tax cuts of 2001 and 2003 done for anybody?

    (Imagine standard flashback graphics here). It’s the year 2000. Dawn of a new century. A surplus. Top economy in the world, well on its way to paying off Reagan’s Credit Card Bills (the true root of all our fiscal arguments) within a few decades.

    But then, a certain baboon got into office. A baboon so eager to be loved (and so eager to bankrupt America) that he then proceeded to break open the Treasury and mailed checks to everybody. Yes, that happened. (I tried not cashing mine, but they just sent me another one unasked-for, they were that eager).

    I’m glad to see that I’m not the only one who remembers what happened a decade ago.

  98. 98
    Cacti says:

    @spongeworthy:

    You guys don’t seem to remember how much we squealed at Clinton. Not quite like you hounded Dubya

    I know what you mean. Dems relentlessly hounded Dubya over such trivial items as starting wars under false pretenses.

    The GOP, on the other hand, stuck to the important stuff. Like blowjobs.

  99. 99
    Forum Transmitted Disease says:

    A baboon so eager to be loved (and so eager to bankrupt America) that he then proceeded to break open the Treasury and mailed checks to everybody.

    A lightweight. Way in over his head. Certain one-termer.

    Bin Laden changed all that. I wish Seal Team Six had shot him in the balls first.

  100. 100
    Daulnay says:

    @Hoodie:
    I’m not giving Bernard crap. He stated the ‘regulatory uncertainty’ argument in an extreme form that misrepresented it. Then he dismissed that form of it as illogical. He deserves crap for doing that. (And now that my coffee is kicking in, what he did was cast it as a straw-man false dilemma. His logical offense is attacking the straw-man he created, rather than arguing a false dilemma.)

  101. 101
    gene108 says:

    @Forum Transmitted Disease:

    Not exactly stupid to ignore food/gas prices.

    So what should central banks do? Raise interest rates because wages are flat and growth is anemic due to higher gas and food prices?

    A textbook business expansion results in people getting more money to spend on a limited supply of goods.

    Suppliers raise prices and/or invest in more equipment/employees to expand capacity to meet demand.

    Better employment environment results in employees being able to negotiate higher wages, which drives up the input cost of goods that get passed onto consumers, i.e. inflation.

    Even with higher gas and food prices the wage increase/money in the consumer’s pocket effect of economic expansion isn’t happening. Economic growth is still anemic, supply exceeds demand and suppliers are producing well below capacity.

  102. 102
    Andrey says:

    @gene108:

    I’m just restating what was being said around me 3 years ago.

    And that’s the problem. What was being said does not actually matter. What was being done actually matters. If “regulatory uncertainty” had a significant effect on what people do, it would be possible to find that effect in the statistical evidence.

    If a bunch of business owners complain about how the uncertainty is killing them, then continue doing business anyway, there’s no problem. And if a statistically insignificant portion of them close up shop or whatever, it’s still not a problem.

  103. 103
    gene108 says:

    @Paul:

    Destructive doesn’t begin to describe. So far, it’s too early to say how much of an improvement the ACA will be for small businesses.

    It really depends on how it impacts the overall cost curve.

  104. 104
    negative 1 says:

    @jibeaux: Except in this version the chair is smarter than the person it represents.

  105. 105
    Some Dude says:

    @Culture of Truth:

    Same exact thing with “state’s rights.”

  106. 106
    Bernard Finel says:

    @Daulnay: Um, it is perfectly standard practice in laying out evidence to proceed from the general form of the argument to specific. I first refuted the general claim that Obama’s overall atmosphere of regulatory uncertainty cause the slump by noting the logical flaws with that, then I proceeded to the specific industries most affected. This is how people usually construct arguments. My apologies if it fails to meet with your idiosyncratic expectations.

  107. 107
    rlrr says:

    If Republicans want to eliminate uncertainty, they should support Soviet style 5 year economic plans…

  108. 108
    Andrey says:

    @spongeworthy:

    Look, everybody knows the debt is not sustainable.

    False in every meaningful way. Yeah, sometime in the next few decades we’ll need to pay down the debt. There’s no reason to believe we need to pay it down in the next 4 years, or that we ever need to reach 0 debt.

    The bill’s coming due and all of us here know what the first proposal from your side is going to be—higher taxes on earners and corporations. Until that hammer falls, it remains the very definition of uncertainty.

    You contradict yourself. If everyone knows what’s coming, there is zero uncertainty.

    As for the bill coming due – overwhelming evidence demonstrates that Democratic administrations are more likely to actually pay the bill. Republicans are the ones who want to drown the government in a bathtub. How do you expect a tiny government with no tax revenues to pay any bills?

  109. 109
    Cassidy says:

    @Forum Transmitted Disease: Fun movie though. It would have been better with more subtle scary, but Michael madsen and Vinnie Jones have never been subtle people.

  110. 110
    BenA says:

    @Forum Transmitted Disease:

    There’s a more broad-based reason why the economy is struggling, and indeed will probably struggle under any president from here on out except for brief spurts of growth: we’ve tapped what there is to tap on a finite planet.

    @barath: Maybe 1 in 20 people is even willing to concede that this could be the issue. But this is the reality. I am very afraid for what happens when people start to realize that from here on out, economic activity really is a zero-sum game, where gains can only happen if someone else loses.

    Quite frankly I think this is bullshit. I think we’re no where near tapping out the planet. What we can’t do is continue to operate so inefficiently. Even if you think our resources are becoming more constrained… we literally have mountains of resources that we tossed out decades ago.

    I think this kind of dialog is counter productive. It’s like when environmentalists start yammering on about sacrifice. It turns people off. The trick is to maintain the same standard of living (or even improving it) while doing it in a much more efficient manner… Just look at the efficiency improvements in lighting, batteries, and even the ubiquitous flat screen TVs. No one I know is pining for the days of the old wasteful tube TVs and monitors… LCD/LED displays are a a great illustration of my point: They cost far less to manufacture, they use tremendously less power, have no where near the amount of hazardous materials in their construction, and they deliver a better final product.

    I think the main reason the economy is struggling is we have a bunch of bankers and rich assholes with their thumbs on the scale.

  111. 111
    Redshift says:

    @gene108:

    I’d prefer a system that’d make it so everyone can get their own policy and not have it be a cost to employers anymore.

    Once HCR takes effect, businesses can get out of providing health insurance, they just have to pay the penalty to cover part of the cost of their employees buying insurance in the exchanges. So, they can avoid the costs of administering it. To have it not be a cost at all, the business would just be giving all their employees a pay cut, because benefits are part of their compensation. They can do that, too, but I suspect employees would probably not be happy with getting a massive pay cut just to have it not be a cost to their employer.

    Bottom line, a lot of things business bitch about amount to “I wish I didn’t have to pay for this,” to which they might as well add “and a pony.”

  112. 112
    weaselone says:

    @Lurking Canadian:

    Also, picking up additional hours, getting a weekend job, or negotiating for a pay raise is off the table because it will not solve the entire problem. The pet’s have to be euthanized, Grandma’s got to go, and Timmy’s broken leg will just have to heal at an unnatural angle. There’s no helping it.

  113. 113
    Redshift says:

    @Andrey: Exactly. I live in the DC area, and whenever some legislation affecting business is coming up in Congress, we get not just water-cooler talk but expensive TV ads about how it is going to destroy businesses, or make something you love impossible, or whatever. The dire effects never come true, and you can bet that the people paying for the ads have been preparing for the legislation, not just planning to go out of business if it passes.

    Fact is, businesspeople bitch a lot, but that doesn’t mean that what they’re bitching about has any real effect on their business.

  114. 114
    gene108 says:

    @Andrey:

    If “regulatory uncertainty” had a significant effect on what people do, it would be possible to find that effect in the statistical evidence.

    The idea of regulator uncertainty in 2009 was real to a lot of people. Whether or not those regulations would’ve materially impacted their business is hard to say.

    A lot of regulations never got out of the Senate.

    Government hasn’t gotten anything done in the last 2 years.

    Since there haven’t been the sweeping reforms liberals dreamed of and there doesn’t look like massive regulatory reforms are around the corner, regulatory uncertainty became nothing more than a talking point for the right.

    It was something on people’s minds once that never materialized, so there shouldn’t be much statistical evidence of it.

    It’s about as tangible now as the New Black Panther Party suppressing the white vote in Philadelphia.

  115. 115
    Dennis SGMM says:

    @burnspbesq:

    Pithy, succinct. Nice catch!

  116. 116
    Xecky Gilchrist says:

    they seem largely unable to enunciate what precisely those failed policies are.

    It’s an article of faith, not intended to be a factual statement. It’s more true than facts.

    Likewise, some ponyprogs are disappointed with Obama and can’t tell you why – it’s because they’ve been told they are. By the same press that said GWB was an extremely popular wartime president.

  117. 117
    Brachiator says:

    They will often cite the over-regulation, deficits, and loose money as the key problems.

    Or maybe Blue Money

  118. 118
    Another Halocene Human says:

    If the dollar is weak now, blame GWB and also ECB pursuing a strong Euro for whatever stupid reason. It’s actually good for US manufacturing but bad for the “pain at the pump”. That could be alleviated if the Teabaggers in Congress weren’t trying to gut public transit funding. For years there has been a bill proposed, but not passed, which would provide operating assistance to transit systems to defray the cost of fuel. This would stimulate economic growth by providing access to jobs x employees.

    In terms of changing travel patterns, lack of jobs has killed travel more than “pain at the pump” and, on a day to day basis the culprit is much tighter credit. Those that can afford the gas but NOT fixing a car with a blown head gasket are … walking. In my corner of the world, anyway.

  119. 119
    Another Halocene Human says:

    @Bernard Finel: Today’s rube prefers rhetorical wizardry to the pretense of a logical argument. Lighten up, Spock [guffaw, guffaw].

  120. 120
    Paul says:

    @gene108:

    Please read comment 111 by redshift. He answered it perfectly. I truly don’t understand why people claiming to represent business are against ACA.

  121. 121
    Bokonon says:

    @Forum Transmitted Disease: There is inflation in commodities pricing driven by demand issues and supply issues and currency issus … but a bunch of it is being driven by Wall Street. They have jumped in with both feet.

  122. 122
    Another Halocene Human says:

    @hep kitty: Whenever Rein’st’ Pubis opens his mouth these days, all I hear is “Argle bargle bargle.”

    His press conference at the RNC ought to presage a Michael-Steele-style exit for him, but don’t bet on it.

  123. 123
    Another Halocene Human says:

    @Ronzoni Rigatoni: OCCUPY PUBLIC SECTOR

  124. 124
    Another Halocene Human says:

    @Bokonon: The government could end that right quick by tightening CBOT rules (like, you actually have to take delivery and shit). I think they did so a little bit but never went all the way.

    Of course that would lead to epic butthurt emitting from the finance sector, but, hey, less profits for them to buy elections with, less food riots, win-win.

  125. 125
    negative 1 says:

    @gene108: I don’t think they’ve been overblown, I think they’ve been entirely fictionalized. Name one industry that does not face uncertainty on many fronts. Heck, how much certainty is guaranteed in software or computer hardware at all? Yet Google bravely soldiers on. However, a tax on carbon is supposedly going to put Constellation Energy out of business? How is the certainty of their power supply costs? Or the certainty of the individual plant suppliers in the cost or availablity of their raw goods? What a crock the entire argument is. Business is nothing BUT uncertainty.

  126. 126
    Another Halocene Human says:

    @gene108: But think about what was politically possible. You can forget about getting serious energy or carbon regs through congress right now.

    And while existing businesses–that were hurting anyway, absent regulatory changes–may have perceived some pain (hey, I remember freaking out over changes to 990s but it turned out to be no big deal, but who wants to sit there dreading a major upheaval?), it was perfect timing to change as you come out of a recession when the sidelined capital and firesaled capital equipment and huge pool of labor is there for startups who will now be starting up under the new environment with no sunk costs/path dependency in the old environment. It means more efficiency. Which is ultimately more productive in the long run.

  127. 127
    Another Halocene Human says:

    @Villago Delenda Est: Heh, that sounds like dealing with a labor contract. “Ahem, my problems with my stakeholders are more important than honoring my contract with you.”

    It’s a CONTRACT you lame-ass motherfucker!

    You wanna know why labor is coming back? Obama is replacing Bush flacks with pro-labor appointees at NLRB and OMBS. Labor unions are actually trying to organize again. Aggrieved employees are going on strike. Also, conditions suck out there for workers so it motivates strikes, even wildcat strikes, which we are seeing. But the unions themselves are trying to organize which they had given up on under GWB. So firebaggers who think they’re pro-labor need to stop trying to elect Republicans. How pro-labor are you?

  128. 128
    Another Halocene Human says:

    @Bobby Thomson: As long as they WIN the election instead of putting a GWB or LePage in office. And that means trying to win local elections, acting like a real political party, not wanking like the Greens because hey, free money and publicity so we can pay our executives another $50k a year with all the donor cash that comes in from well-meaning deluded people. The Green Party nationally is like a less-lucrative church.

    So… how many Greens in the Massachusetts House of Delegates again?

  129. 129
    Another Halocene Human says:

    @Paul: Or they are a $200k/yr + expense account lobbyist for big business.

  130. 130
    burnspbesq says:

    @Andrey:

    Not to mention that “the bill coming due” seems to be inconsistent with the market reality that real yields on every Treasure security with a maturity of ten years or less are negative.

  131. 131
    burnspbesq says:

    @Ash Can:

    Re “Invisible Bond Vigilantes:”

    IIRC, the term was invented by Krugman back in ’09.

    In wingnut macroeconomic theory, when the Eebil Near Preznit tries to run unsustainable deficits, the Bond Vigilantes are supposed to administer the necessary discipline by intervening in the market to drive down bond prices (and, therefore, drive up interest rates).

    You will have noticed that that hasn’t happened, leading smartasses like yours truly free to speculate about what else the Bond Vigilantes might be doing, since they aren’t kicking the Eebil Near Preznit back into line.

  132. 132
    burnspbesq says:

    ETA: DeLong has a photo of the Invisible Bond Vigilantes.

    http://delong.typepad.com/sdj/.....e-sky.html

  133. 133

    Thank you! This was an excellent post and I think for the first time I am beginning to understand the economic arguments being made. You definitely did not waste my time, so kudos.

  134. 134
    AxelFoley says:

    @rlrr:

    Aided by the pundits who after Mondale’s defeat in 84 spent the next 8 years claiming it was impossible for a Democratic Presidential candidate to put together a win in the Electoral College. Clinton’s real sin was proving theses pundits wrong (who then revised their claims by saying only a southern Democrat could become President).

    I wonder what their next revision will say? Only a Kenyan Democrat could become President?

  135. 135
    Marmot says:

    This post is full of charts and will remind you, I fear, of Matt Yglesias. If that bothers you, please read no further.

    Man! Charts! I love charts! So preferable to “SOMEONE SAID SOMETHING ON THE INTERNET TODAY AND IM SOOO MAAAAAD!”

    I feel like I’ve actually learned something.

  136. 136
    Daulnay says:

    @Bernard Finel:
    OK, let’s go into details. I respect you a lot for the meat you bring to your writing, and your (except for this) solid argumentation.

    Absent some guaranteed permanent GOP majority, there will always be some regulatory uncertainty.

    This is unremarkable, and true.

    If the “job creators” will only invest when they are absolutely certain not to face regulatory hurdles in the future, then they will never invest.

    This is a well-formed (correct) conditional statement, but the hypothesis is never true. It is not part of the argument that the Republicans are making, either.

    Even if Romney wins in 2012, they would still need to fear the return of an “anti-business” Democrat in 2016.

    True, but only if you’re trying to argue from the mischaracterization of the Republican argument.

    After all, according to this argument, the “job creators” have been sitting on the sidelines for the past four years already.

    The valid argument made is that business investment is discouraged, suppressed, rather than completely cut off or ‘on the sidelines’ – completely out of the game. The actual R. argument is that the discouragement is enough to put a measurable, real drag on the economy that prevents a full recovery. That is not the argument that you dismantle.

    If regulatory risk is that severe, and investors are are risk averse as this theory proposes, then recovery will never occur.

    This conditional statement is logically true, but no one is seriously proposing that theory as a true theory of investor risk, as far as I know. So your statement is irrelevant to the actual argument. Obviously, you’re suggesting it as the Republican view, but that’s a falsehood.

    Further it is difficult to understand how economic growth could ever occur if this line of argumentation were plausible.

    Even the most anti-regulation Republicans do not make this line of argumentation, so we don’t need to examine its plausibility. What I really wonder is whether you actually think Repubs are making that argument, and if they are, can you show us? I think it’s a flat-earth position that few if any Repubs. would endorse, they’re more arguing that the earth is rounder or more oblong than it really is.

    As such, their actual argument is logical, even if it isn’t supported by facts. And that’s the problem I have with this article. Your writing is normally solid and meaty, with good information, and well-argued. It’s a good accompaniment to the light, fluffy snark that fills most of the rest of Balloon Juice. That’s why I’m pushing back, this post isn’t up to par.

  137. 137
    JoyfulA says:

    @Forum Transmitted Disease: The original measure would have had a business submit forms for wherever it spent money, eg, Office Max, Apple, not just outside contractors to whom it pays >$600, which is how it’s been since Reagan. That original measure was quickly reversed.

  138. 138
    Jennifer says:

    The problem with our economy is one of demand: there isn’t enough of it to sustain full employment. The reason there isn’t enough demand is that there are too many people with too little money. The reason too many people have too little money is that too few people have most of the money, the result of paying the people who produced the goods and services to generate that money too little in wages, so that more money could go to owners and investors.

    The six heirs to the Wal-Mart fortune have a combined net worth that exceeds the financial net worth of the bottom 41% of all Americans, which should answer any question anyone might have about why our economy isn’t recovering very quickly. Republicans would have you believe that the Walton heirs are somehow more “productive” than almost half the country and should be rewarded with a tax cut. Reality says that 6 people, no matter how productive they are, are not generating more wealth via their labor or other activities than 60 million others are, and that no matter how profligate they may be in their spending habits, they will not consume as much in goods or services as 60 million (plus dependents) others. When a few people are hoarding all the money, there isn’t enough demand to keep the economy moving along. That’s where we are, and where we’ve been, for several years now; from 2000 – 2008 we were in roughly the same position except the wealth hoarders were loaning everyone money to keep things moving. It’s not going to get better without higher mandated wages or higher taxes on excessive wealth, or preferably, a bit of both. Those are the only tools available to government to control concentration of all the wealth into the hands of a few money-hoarders.

  139. 139
    Enhanced Mooching Techniques says:

    @Culture of Truth: What is with Romney’s the Republican’s fantasy Bill Clinton secretly supports them?

  140. 140
    xian says:

    @Mark S.: Where’s Political Observer? Masturbating to “unskewed” polls.

  141. 141
    xian says:

    @Raven: which is weird since social security has been shored up repeatedly and would be fine with some tweaks, including/especially raising the cap on contributions.

  142. 142
    Liberty60 says:

    In the financial sector, “uncertainty” equals “risk”; and “risk” is rewarded with return.

    I am reminded of that exchange between Don Draper and Peggy where she he says “I give you money, and you give me ideas”; she says “But you never say thank you”- to which he snaps “THATS WHAT THE MONEY’S FOR!”

    You don’t like market uncertainty? THATS WHAT THE INTEREST IS FOR!

  143. 143
    Unsympathetic says:

    @Daulnay:

    I’m calling you out, son.

    Show the difference between the “argument Bernard took apart” and the “Republican argument” using dollars, not hand-waving.

    Instead of using fact to refute his post, your entire response consists of “waa waa that’s not the real argument” – as though this mythical solution will descend like Saint Ronald from the heavens and satisfy everyone.

    You’ve got nothing but hot air, just like all Republicans.

    Got something? Use numbers to show it.

    Can’t wait for you to ignore me – of course, we’ll all know it’s because you’ve got nothing but pride to back up your ridiculous assertions – but hey, when the President is black, all lies are acceptable!

  144. 144
    Daulnay says:

    @Unsympathetic:

    Dude, I’m a radical lefty, a syndicalist who believes that corporations are just another mutation of authoritarianism. I like Obama, will vote for him, and think he’s made the best of a bad situation. I also respect clear logical arguments, and am happy to be on the side where they’re much more common and grounded in reality. Bernard’s usually pretty good about that, better than most of the ‘Juicers, so I was disappointed, and said so.

    Setting up a straw argument to knock down isn’t good logic, no matter how rhetorically appealing it is. And you lose the respect of people who know better, even if they’re on your side. Of course, mis-labelling the argument and being somewhat incoherent, as I was in my first reply, does pretty much the same thing.

  145. 145
    The Fat Kate Middleton says:

    @mai naem:

    I am out of patience with these fcukers. I hope BHO fcuks them up the ass with the baseball bat in November. I hope this is followed up by a heavy painful smack on the back of the head by Nancy Pelosi and a TKO by Harry Reid, he being a former boxer and all.

    I find your ideas intriguing. I wish to be your wife.

  146. 146
    The Fat Kate Middleton says:

    @Ronzoni Rigatoni:

    But what the hell do I know?

    Enough, actually. Like.

  147. 147
    Paula says:

    @Raven:

    So is the idea that Obama’s going to un-reject Simpson-Bowles or something?

  148. 148
    The Fat Kate Middleton says:

    @Xecky Gilchrist:

    Likewise, some ponyprogs are disappointed with Obama and can’t tell you why – it’s because they’ve been told they are. By the same press that said GWB was an extremely popular wartime president.

    OK – from my BIL: “Ahhh. I just don’t like ‘m. Can’t say why.” Me: l know you’re not a racist, but so many people say what you do and can’t explain why … and I have to think that maybe they just don’t like that he’s black.” Brother-in-law’s response: “Don’t call me racist! I’m not! I like niggers!” (Face palm.)

    Same guy told me the main reason GWB was a hero was because he called for torture, and that’s really why Obama was able to lead the capture of bin Laden.

    I know none of this has to do with ponyprogs, but it was a great excuse for me to share this.

  149. 149
    Duane says:

    In all this talk of economics and the economy and the regulation uncertainty for businesses….I didnt catch one reference to the stock market…. Which tends to be all I can understand….. Under the previous Repub…the Dow got cut in half…not quite but almost…. since Barack Obama was elected…the Dow has pulled a double….. The reality that someone was going to try fix the economy was evident to the market upon election… and to me that says it all….. If Obama was so bad for business….it would be at least somewhat reflected in the market.

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