I want to resurrect a comment from the comments of this post and put it on the floor for discussion. In response to my question about the high rate of employment prior to the financial crisis, frequent commenter Ben Wolf wrote:
So many were employed because there was demand for their services. Now we have large numbers of disemployed who can’t signal demand to firms and the communication circuit can’t re-establish itself.
The first sentence is tautologically true. It’s not distinctive of the period prior to the financial crisis. It’s always true. I find the second sentence interesting but I honestly don’t think it tells the whole story.
Let’s try this additional (not alternative, additional) explanation on for size. Divide those who’ve lost their jobs since the financial crisis into two groups: those involved in direct production and those involved in services or indirect production.
Those who were engaged in direct production were largely producing houses. Now their numbers are about what they were fifteen years ago and I doubt they’ll return to the level of 2007 any time soon. Note how large a proportion of present unemployment they constitute.
As to those engaged in non-production services and indirect production, I think that many of them were producing what’s referred to as “institutional capital”. I would define institutional capital as the roles and services that make organizations function as they do. When how an organization functions changes, the nature of the production of its institutional capital changes, too.
While I think that over time companies will re-build the staffs they destroyed in the panic of 2008 and 2009, that doesn’t do much to help the people who were thrown out of work. I honestly don’t know what to do. My solution has been a lot more direct production which would inevitably employ some more people.
I do know that our present situation in which state and local governments, constrained by revenue growth slower than the growth in their payroll expenses, are firing people rather than forgoing pay increases for the rest. That’s probably the worst of all possible worlds.
The United States is at a constitutional tipping point: The rise of an uber presidency unchecked by the other two branches.
This massive shift of authority threatens the stability and functionality of our tripartite system of checks and balances. To be sure, it did not begin with the Obama administration. The trend has existed for decades, and President George W. Bush showed equal contempt for the separation of powers. However, it has accelerated at an alarming rate under Obama. Of perhaps greater concern is the fact that the other two branches appear passive, if not inert, in the face of expanding executive power.
He produces a lengthy list of examples:
The heart of the healthcare law was a set of minimum requirements for insurance plans. After Obama was embarrassed by the cancellations of millions of nonconforming plans (when he had said no one would lose a plan they had and liked), he created first one temporary exemption and then, last week, another, adding two years to the compliance deadline set by law.
On his own authority, Obama also chose other dates for compliance with the employer mandate.
Congress ended a subsidy for members of Congress and their staffs so that they would obtain insurance under the ACA on the same terms as other citizens. Obama ordered that the same subsidies would continue, in defiance of the law.
He asked Congress to change the law to exempt certain classes of immigrants — particularly children — who are in the U.S. illegally from deportation. Congress refused to pass the so-called Dream Act, but Obama proceeded to order agencies to effectively guarantee the very same changes.
The administration ordered all U.S. attorneys to stop prosecuting nonviolent drug crime defendants who would be subject to what Atty. Gen. Eric H. Holder Jr. called draconian mandatory minimum sentences. The new rule effectively negates sentencing provisions set by Congress.
Obama opposed the No Child Left Behind Act and in effect nullified it through waivers of his own making.
For years, the Wire Act was interpreted to mean that Internet gambling was prohibited, which some states and businesses opposed. The Obama administration declared the act would now be treated as having the inverse meaning.
By far the least traumatic solution to the dangers in a too-expansive use of executive power would have been for the president not to have done it. Unfortunately, that’s a jinn that cannot be returned to the bottle and unless curbed we should expect future presidents to expand their power even farther. That has, sadly, been the history of the American republic.
In my opinion the second least bad alternative would be for the courts to automatically grant standing to the Congress in any case involving executive discretion. It seems obvious to me that the Congress should have such standing, either both houses together or either house severally, I honestly can’t see how a separation of powers could work in the absence of such standing, and I hope that one of my better-informed readers could brief me on the history of the Court’s present position on Congressional standing.
Failing that the only alternative open to the Congress would be a much lower threshold of what constitutes an impeachable offense.
It seems to me that those are the alternatives from which we must choose. Either we must accept an executive branch that enforces the law or fails to enforce it at its complete discretion or differences of opinion between the executive and Congress over what is necessary and proper must be considered an impeachable offense. That’s a Hobson’s choice.
In last night’s smoker, a number of professional performers gave an elaborate program.’ Songs by Miss Babe Neef, the ‘Irish Nightingale”, so pleased the- listeners that thunderous applause greeted the end of each selection. Miss Rue Arland, the “Blue Streak of Blue,” could not present enough encores of her specialty dancing. Her singing and dancing proved to be a “true hit.” No less entertaining were songs by O. H. Blanchard and Opal Wolfenbarger. Blanchard also entertained with a number of monologues. The “biggest hit” of all, at least the chief object of attraction, was “Baby Coleen Neef.” The 2-year-old sister of “The Irish Nightingale” proved she could follow her “big sister” in the singing line, not to mention her ‘ability to dance. Local talent was brought into play during the smoker and six “lusty voices” presented a number of “songs and other noises classified as songs.”
“Babe Neef” was my grandmother’s stage name. O. H. Blanchard was my grandfather. “Baby Coleen Neef” was my mom’s stage name. As you can see, they played all the bright lights.
I haven’t posted much this year about the 2014 Iditarod, now under way. This year’s Iditarod has had an unusually large number of scratches by veteran mushers. Many of the scratches have been caused by injuries which in turn are a consequence of the lack of snow.
Courtesy of Anchorage Daily News, there’s a really hair-raising video of top musher Jeff King, equipt with a head cam, negotiating the trail between Rainy Pass and Rohn:
Now that’s a rough trail. Check out the expression on his wheel dogs’ faces while Jeff frantically tries to right his sled after a spill late in the video, as if to say “What?” That’s severely edited down from a much longer (and higher quality) video which I wish I could show you. Sadly, it’s restricted to subscribers to Iditarod Insider which, as serious dog sled racing fans, we are. How serious? During opera intermissions the other night my wife was glued to the screen of her smartphone, watching the changing standings in the race.
As I reported on this blog yesterday, starting with the administration’s more recent enrollment total of 4 million, less than 15% of the 17.2 million people the Kaiser Family Foundation has estimated are eligible for subsidies have signed-up and paid for coverage––and many of these people who were eligible for subsidies were also previously insured.
The uninsured just aren’t buying Obamacare.
I believe they are not buying it because the premium––even net of the subsidies––is too much for plans that have deductibles that are too high. Consulting firm Avalere has put the average Silver Plan deductible at $2,567 and the average Bronze Plan deductible at $4,545. People are often being asked to pay hundreds of dollars per month in premium, net of subsidies, and they don’t see the value.
Hat tip: Megan McArdle. I think they’re not buying it because one of the assumptions underlying the PPACA was incorrect. The PPACA assumes that lots of people want healthcare insurance but aren’t able to afford it. I think that lots of people want healthcare but aren’t able to afford it. Not insurance, care.
He ends his post with what I think is a bit of wishful thinking:
Starting in April, when the final numbers are in, I hope we can have a meaningful conversation over how to fix the new health insurance reform law that is clearly not working.
That’s wishful thinking for any number of reasons. For example, what makes him think that we’ll have the “final numbers” in April? The open enrollment period could be extended, then extended again, indefinitely. Even if the open enrollment period isn’t extended the final numbers might never become available. And, most importantly, rather than starting a “meaningful conversation” I think that a lot of the PPACA’s supporters are more likely to double down on a plan “that is clearly not working” than to acknowledge that their assumptions were wrong to begin with and that they’ve been exerting all that energy defending a law that solved the wrong problem.
The past five years have been a Groundhog Day recovery. Every day, we wake up hoping that this will be the day that the economy finally picks up. And every day, we wake up to hear Sonny and Cher playing find out that it hasn’t. Jobs growth just keeps chugging along at 2 percent pretty much no matter what.
I think there are several points to make here. First, reversion to trend doesn’t suggest a structural economic problem or, at least, not a recent one. It suggests a cyclic problem.
Second, the U. S. birth rate is just under 2%, right about where it’s been for the last 40 years. We don’t have the same demographic problem that Russia or Germany or Japan have. We don’t import large numbers of foreign workers because we don’t have enough workers in the pipe. We import large numbers of foreign workers to save the business models of businesses that require a continuous stream of low income workers (and the incomes of their owners).
Finally, we’ll never escape the problem we have which I would characterize as too many people who have been unemployed in the long term without asking the right question. I think the right question is “Why were so many people employed before?” rather than “Why aren’t jobs being created faster?”
Regardless of how American critics of the Obama Administration’s foreign policy have framed it, Russia has serious long-term interests in Ukraine and we don’t. They’d’ve acted much as they have and we’d’ve done what we have regardless of who was president of either country.
If I have a criticism of the Obama Administration’s handling of the crisis in Ukraine, it’s contained in TR’s terse summary of his own policies: “Speak softly and carry a bit stick.” We still have a big stick, even with the defense cuts proposed by the Administration we’ll still have the biggest stick in the world. We can’t escape from the reality of our big stick. I just think we should be speaking more softly than we are.
After nearly ten years to the day I have changed web hosts. The declining performance, frequent security breaches (which I attribute to them), repeated suspension of my blog—mostly due to brute force or multi-site attacks on my blog—and complete lack of customer support had become intolerable. Several years back I had identified another web hosting company that used a somewhat different hosting strategy than the “shared server” approach used by my old web host and appeared to have better customer support than my old web host and established a backup site with them.
After several days of transfer, testing, and domain name propagation I think I’ve completed the somewhat stressful transition. I may have missed a few comments during the gap.
I would very much appreciate any reports of performance or site behavior problems. Please leave them in the comments. With any luck my new digs will result in a better experience at The Glittering Eye for everyone.
I’m convinced that if you make it right gumbo never turns out exactly the same twice. That stands to reason. Good gumbo is mostly made from things that haven’t been processed into uniformity: onions, bell peppers, celery, seafood, and whatever you like to put into it.
Last night at my wife’s urging I made a pot of gumbo. Shrimp because that’s what I could afford. I didn’t think it was going to turn out too well for one reason or another but it was one of the best gumbos I’ve ever made. That’s how it is with gumbo.
There’s an interesting op-ed on inequality from Thomas Edsall in the New York Times today. In the op-ed Mr. Edsall takes note of the work of economist Richard Freeman suggesting that there is an optimum level of economic inequality from the standpoint of economic efficiency with inequality less than the optimum or greater than the optimum producing less economic growth than might otherwise be the case, creating a curve of outcomes reminiscent of the Laffer Curve. Here’s the part I think we should mull over:
Freeman argues that the costs of excessive inequality are high: “Inequality that results from monopoly power, rent-seeking or activities with negative externalities that enrich their owners while lowering societal income (think pollution or crime), adversely affect economic performance. High inequality reinforces corruption by allowing a few ‘crony capitalists’ to lobby politicians or regulators to protect their economic advantages. When national income goes mostly to those at the top, there is little left to motivate people lower down. The 2007 collapse of Wall Street and bailout of banks-too-big-to-fail showed that inequality in income and power can threaten economic stability and give the few a stranglehold on the economy.â€
Let’s put that in terms of concrete actions and policies. Creating monopolies—like the cable companies, for example—produces less economic activity. Bailing out banks produces less economic activity. Bailing out automobile companies produces less economic activity. Innovations of the sort that the financial sector engaged in not all that long ago (“activities with negative externalities that enrich their owners, etc.”) produce less economic activity. Rent-seeking of the sort exemplified by the scandalous farm bill recently enacted into law by the Congress produces less economic activity. Giving your bundlers sweetheart loans for their ill-conceived sustainable energy projects reduces economic activity. Subsidizing the healthcare sector produces less economic activity.
Now, I can see how people (politicians, especially) feel the need to do all of those things anyway, for reasons other than economic efficiency. Fair enough. At some point don’t you either a) need to come up with a way to replace all that economic activity you’ve decided to sacrifice or b) just acknowledge that all of the jobs lost due to cronyism, rent-seeking, and so on just had to be sacrificed because you can’t make an omelet without breaking eggs?
