Americans Don’t Care About the Economy

A recent poll shows President Obama’s approval numbers declining as the price of gasoline rises:

Disapproval of President Obama’s handling of the economy is heading higher — alongside gasoline prices — as a record number of Americans now give the president “strongly” negative reviews on the 2012 presidential campaign’s most important issue, according to a new Washington Post-ABC News poll.

Increasingly pessimistic views of Obama’s performance on the economy — and on the federal budget deficit — come despite a steadily brightening employment picture and other signs of economic improvement, and they highlight the political sensitivity of rising gas prices.

How do you reconcile these apparently contradictory positions? If the economy is improving, shouldn’t the president’s approval rating be rising right along with it?

The answer is pretty simple. Americans don’t care about the economy. Or, rather, when poll-takers say “the economy” Americans don’t think about the figures being reported by the BLS, the NBER, or the CBO. Let me give some examples:

When the question on the survey is are you concerned about? Here’s what people are thinking
Unemployment Do I have a job? Do my neighbor and my brother-in-law have a job?
Inflation Is my paycheck larger than it used to be? Does it go as far? Have you seen my cable bill?
Energy Are gas prices rising? Is my electric bill higher than it used to be?
Housing Do I have a place to live? Have I been foreclosed on? Have my neighbor or my sister-in-law been foreclosed on?
The financial system Am I overdrawn? Why are bankers getting trillion dollar bailouts?
The Euro How ’bout them Cubs?
The economy See above

Over the period of the next six or seven months I’d put the odds of the economy booming at about 1 in 10, maybe lower. I think there are just too many moving parts with a lot of them going in the wrong direction. The economic circumstances in Europe and China, just to name two. I think the odds of the economy moving along at its present unsatisfactory rate or going into a serious tailspin are about even.

All of that goes to say that the November election in all likelihood, barring some unforeseen catastrophe, regardless of what anybody else tells you, will be very, very close.

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Goods and the Government and Everything Else

I think that Karl Smith is onto something in his recent posts analyzing the evolution of employment in our economy, first in the recession and recovery, then going back earlier and charting that development since 1939, and finally with a log graph since 1970.

Writing about the recession and recovery he observes:

Here I basically split the labor market into two parts: Goods and Government and everything else.

Everything else hit a wall in 2008 but as you can see it was a nice natural V. It was not even the job-less U of 2000. And since the beginning of 2010 everything else has been growing just as fast as the last recovery. As we moved into 2012 job growth seems to be speeding up faster than anything we saw last time around.

The difference this time was goods and government. To cut it down to the micro-level I like we are largely talking about construction workers, metal and automotive workers, and school teachers.

See, in particular, this graph. However, as I’ve said before in other contexts this analysis is a bit like a fan dancer’s fan: while apparently revealing it’s actually concealing. Rather than the dichotomy that Dr. Smith illustrates, I’d really like to see three growth series: goods and government, healthcare spending, and everything else.

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Whistling Past a Graveyard

Patrick Pexton, the “public ombudsman” for The Washington Post, exhorts his colleagues at the Post to devote more attention to members of the laity who dare to attempt to contact them:

Post editors, reporters, bloggers and copy aides: Return the blessed phone calls and e-mails from readers! And do it with courtesy, respect and politeness, even when the caller, or writer, is persistent or even unpleasant. Please.

By doing so, you’ll do more to keep, satisfy and engage readers than anything you say in your next 20 tweets.

Here are some recent tales from readers:

A Virginia reader copied me on three e-mail queries in the past year to various Post writers, none of which were acknowledged. The e-mails were polite, uncomplicated and probably could have been answered in 30 seconds. After the third one, he wrote me this: “Another Post prima donna who does not answer a reasonable e-mail comment.”

I think he’s whistling past a graveyard. You don’t go to a shoe store for a good sandwich. That there is even a need for such a thing as a public ombudsman puts the problem into bold relief. They went to J-school because they wanted to talk, not to listen or, even more to the point, to preach rather than discuss. Here’s Medill’s own description of its curriculum:

During your freshman year you will take Reporting and Writing, which covers essential journalistic skills necessary for all platforms; Multimedia Storytelling, an introduction to Web-based journalism; and Introduction to 21 st Century Media, which exposes students to business and ethics trends in the media.

Sophomore year will include Enterprise Reporting in Diverse Communities, which involves in-depth multimedia reporting in Chicago neighborhoods, and Media Presentation, which prepares students for a Journalism Residency within a specific industry.

During junior year, you will take Storytelling and Media Law and Ethics before embarking on Journalism Residency. A broad menu of elective courses, taken from sophomore year on, will round out your Medill coursework.

See a lot there about interacting with readers or viewers? Me, neither.

In all likelihood their heroes are Franklin Pierce Adams, Mike Royko, or Hunter S. Thompson or, if they’re not historically minded, Maureen Dowd and Paul Krugman, notoriously dismissive of criticism. You email Paul Krugman to agree with him not to interact with him or, heavens forfend, disagree with him.

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Finding a Good Cure

Here at The Glittering Eye I generally post about unimportant things. Economics. Foreign policy. Politics. Occasional forays into archaeology, television, movies, dogs, family history.

In this post I’m going to get serious. Let’s talk ham. I’m looking for a really good source for country ham.

The smokehouse from which I ordered my country ham for thirty years is, sadly, out of business. A generational thing, I suspect. I haven’t found a satisfactory replacement.

For a smokehouse the cure is a bit like the marinara in an Italian restaurant. It’s used, possibly with some variations, in practically everything and, if you like it, you may like most of the things there but, more importantly, if you don’t like it, you probably won’t like anything there.

So, I’m soliciting recommendations. Do any of my readers have a good source for country ham?

I think that preferences in ham may well be a regional thing. I’m a Missourian and my dear departed smokehouse was in Arkansas. I could order a Boone County ham but I only know of one smokehouse from which I can get them mailorder.

Ideas?

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How You Control the Message

Mickey Kaus’s remark:

If you were choosing the parts of Game Change to turn into an HBO movie, why would you decide to tell the story of Steve Schmidt when you could tell the story of John Edwards? … I smell Hollywood Liberalism! It’s fun for leftish industry types to mock Sarah Palin. But the Edwards incident is deeply embarrassing–to much of the left, and the press–even though it’s a much more dramatic, complex tale. …

reminded me. There’s more than one way to control the message. How you cover the story isn’t nearly as important as the stories you decide to cover or not to cover.

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Funny

They say that travel is broadening. In token of this when my wife returned after visiting her family in California she introduced me to the site, Damn you, autocorrect!. I may be late to the party (it wouldn’t be the first time) and it may be common knowledge but I didn’t know about it.

The site purports to report amusing and/or embarrassing results from the autocorrect feature when texting using some smartphones. The results very from mildly amusing to milk-out-the-nose funny. Here are some of the best. Since this is a family blog, I won’t repeat them here but they might give you a chuckle or two.

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Necessary and Sufficient Reforms in Healthcare

Megan McArdle Avik S. A. Roy points out the absurd character of the healthcare debate in the United States:

In 2009, according to these statistics, which come mostly from the OECD, U.S. government entities spent $3,795 per person on health care, compared to $3,100 per person in France. Note that these stats are for government expenditures; they exclude private-sector health spending.

If anything, the U.S. figures understate government health spending, because they exclude the $300 billion a year we “spend” through the tax code by making the purchase of employer-sponsored health insurance tax-exempt.

So: if we measure the relative freedom of health-care systems by the dollar amount of government involvement in health spending, the French system is actually meaningfully freer than America’s.

in response to which James Joyner suggests that private businesses will provide the impetus for some more-nationalized form of healthcare in the U. S.:

I’ve argued for years that the combination of unsustainability high growth in health care costs and the enormous competitive disadvantage that puts on American business means that our current system of quasi-private, insurance-based medicine will collapse of its own weight. Like it or not–and I mostly don’t–Americans will wind up with some sort of government-centric model, likely one that provides basic coverage at a fixed price with some option for private supplemental coverage for those who can afford it.

Note that the large graphic illustrating per capita public healthcare spending by OECD countries in which the public healthcare spending in the U. S. outstrips any other country in the world other than Norway and is 20% higher than the country that is otherwise most similar to the U. S., Canada, does not include at least 30% of total U. S. per capita healthcare spending. We spend enormously more than any other country for healthcare.

Over the period of the last 35 years I’ve supported a single-payer system for the United States. More recently I’ve begun to despair that would be enough.

The assumption seems to be that, for example, Germany has lower costs because Germany has a single-payer system. Is that in fact the case? I don’t think that’s the only explanation. It could be that for lifestyle reasons Germans are healthier than we are. It could be that Germans ask a lot less of their healthcare system than we do and, consequently, their costs are lower. It could be that wages in Germany’s healthcare sector are closer to wages, generally, than wages in the U. S.’s healthcare sector are to wages, generally, here. There are all sorts of possibilities.

What I think is clear is that we can’t go on paying as much more for healthcare relative to other OECD countries as we are. I’ve expressed my opinion before: I think the entire system needs to change. Not merely who writes the checks. Neither will reducing administrative costs be enough. It isn’t merely administrative costs that are increasing at too great a rate. I think the incentives need to change. I have no idea how that can happen.

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Pagels’s Take on the Apocalypse of John

There’s a review of Princeton scholar Elaine Pagels’s new book, Revelations at the Washington Post:

Pagels’s new book, “Revelations,” examines a far more familiar text, but it offers revelations of its own for lay readers. Suspiciously slim for such a complex and fraught subject, this five-chapter book whisks us through centuries of religious conflict, ecclesiastical maneuvering and textual scholarship. It’s easy to imagine that Pagels’s obscure academic competitors say mean things about her behind her back — How dare she be so accessible! — but she’s one of those rare scholars who can speak fluently to other professors or to curious people who decide on a whim to learn something about the Bible. Forty-six pages — the longest section of her book — are given over to footnotes that direct students to more technical explorations of these issues. Lay readers, meanwhile, will take this book and eat it up.

Her central point is that this most famous story about The End is a window on the beginnings of Christianity. Those origins were far more dynamic, circumstantial and political than most people realize, and the Book of Revelation played a peculiar role.

Without openly contradicting anyone’s faith in divine writ, Pagels emphasizes that the Book of Revelation was written at a particular time and place: a small island off the coast of Turkey, probably around 90 C.E. after the Romans had burned down the Great Temple and left Jerusalem in ruins. “We begin to understand what he wrote,” she says, “only when we see that his book is wartime literature.” In other words, much of the fiery destruction portrayed early in John’s narrative is not so much prophetic as historical, a florid depiction of the incomprehensible horrors that had left Jews stunned, scattered and frightened. In the wake of Rome’s brutal repression and the flourishing of its empire, John wrote cryptic “anti-Roman propaganda that drew its imagery from Israel’s prophetic traditions.” His “Revelation,” then, was a way of acknowledging recent defeats while knitting them neatly into a narrative of future victory.

Later years saw the Apocalypse of John (as it’s called in my Greek New Testament) make a transition from Jewish anti-Roman propaganda to interpretations against divergent forms of Christianity, a necessity in a church which had become Rome’s official faith.

I may need to buy a copy of the book. I’m actually more interested in how the Apocalypse of John fits into the Jewish apocalyptic tradition and I wonder if the lengthy section the reviewer refers to without comment may be of more interest to me. I know of half a dozen or more non-canonical apocalypses among the Hebrew Bible pseudepigrapha: the Apocalypses of Abraham, Adam, Daniel, Elijah, and so on. The Ethiopian Apocalypse of Enoch, also known as 1 Enoch, was probably written before the Apocalypse of John; the Apocalypse of Elijah probably afterwards. There’s a rich Jewish tradition of apocalyptic literature but many of them had polytheistic overtones and, as Judaism became increasingly monotheistic, they became increasingly suppressed.

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The .1%, the 1%, and the 10%

In an op-ed in the Wall Street Journal Allan Meltzer, a professor of public policy at Carnegie Mellon, intermingles important facts with conjecture and fantasies. Here’s a fact:

In a 2006 study titled “The Evolution of Top Incomes in an Egalitarian Society,” Swedish economists Jesper Roine and Daniel Waldenström compared the income share of the top 1% of earners in seven countries from the early 1900s to 2004. Those countries—the U.S., Sweden, France, Australia, Britain, Canada and the Netherlands—all practice some type of democratic capitalism but also a fair amount of redistribution.

As the nearby chart from the Roine and Waldenström study shows, the share of income for the top 1% in these seven countries generally follows the same trend line. That means domestic policy can’t be the principal reason for the current spread between high earners and others. Since the 1980s, that spread has increased in nearly all seven countries. The U.S. and Sweden, countries with very different systems of redistribution, along with the U.K. and Canada show the largest increase in the share of income for the top 1%.

Here’s a conjecture:

The big error made by those on the left is to believe that redistribution permits the 99% or 90% to gain at the expense of top earners. In much current political discussion, this is taken as an unchallenged truth. It should not be. The lasting opportunity for the poor is better jobs produced by investments, many of which are financed by those who earn high incomes. It makes little sense to applaud the contribution to all of us made by the late Steve Jobs while favoring policies that reduce incentives for innovators and investors.

And here’s a fantasy:

But the top 1% have another advantage. Many of them have unique skills that are difficult to replicate. Our top earners include entrepreneurs, rock stars, professional athletes, surgeons and lawyers. Also included are the managers of large international corporations and, yes, bankers and financiers. (Interestingly, the Occupy movement seldom criticizes athletes or rock stars.)

or, more politely, an exaggeration. This is a fallacy of aggregation. Let’s take lawyers, for example. As I’ve mentioned before incomes in the practice of law occur in a bimodal distribution. The peaks of the distribution are at around $35,000 and $85,000. Those in the upper part of the distribution are graduates of the top 20 law schools, president of law review, work for large law firms, frequently with financial sector and major corporate clients. They are a minority of lawyers. Most lawyers are in the lower part of the distribution—they don’t make it into the top 10% of income earners let alone the top 1%.

Additionally, combining those in the top .1% of income earners, e.g. rock stars, professional athletes, and top management in large international companies, with, for example, a married couple both of whom are physicians make more than $180,000 per year (about the average for physicians), putting them into the top 1% of income earners, gives a very false picture of the entire group. Are the skills of top managers in large international companies really “difficult to replicate”? I think there are probably dozens of people within their own companies who have their skills—they’re just at the top. There can be only one. I suppose that’s argumentative but it has certainly been my experience. The guys who make the most money in the largest companies aren’t always the most competent, they’re just the guys at the top. One tiny piece of supportive evidence: if these guys are so smart and so skilled how come their companies get into so much trouble? Think BP, GM, Chrysler, Citibank, Bank of America, and so on and so on.

Let me provide an alternative explanation for the observed phenomenon. Isn’t it just barely possible that the reason that income inequality is growing is that those in the top deciles of income exploit their influence and power to ensure that’s the case? The AMA isn’t #16 among the all-time highest political donors out of a simple sense of civic-mindedness. It’s securing the incomes of its membership. It’s no coincidence that Goldman Sachs and Citigroup are both in the top 20 (along with a lot of labor organizations including public employees’ labor organizations and the teachers’ labor organizations). Income inequality isn’t growing despite the system; it’s growing because of the system.

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People from Countries With Highly Centralized Governments Think Our System Is Too Decentralized

The Chicago Tribune has, apparently, received an advance copy of the OECD’s territorial review of the Chicago metropolitan area. There’s a conference about it downtown today but the publication doesn’t appear to be online and the OECD’s web site says that it’s in preparation. I don’t know that I’ll have the heart to read it when it does become available. Here’s what the Trib has to say about it:

The report acknowledges the dearth of regional cooperation, and the impediments posed by self-interested public officials. In one of its most relevant observations, it notes how the region suffers under the weight of too many units of government. It counts 1,700 in the Chicago megalopolis. That’s 1,700 separate drains on the public coffers — costly, competitive, and dedicated to perpetuating themselves. The OECD recommends consolidating or eliminating many of these. Amen! But nothing will happen unless Chicago-area employers, policy groups and leaders of those same redundant governments make it happen.

The report looks at how the lack of regional transportation planning, for example, limits growth. It ticks off challenges for upgrading the nexus of road, rail and runway that stretches across Indiana and Wisconsin as well as Illinois: As is, priorities differ. Individual state efforts come and go. Competition among states prevents cooperation. The report provides a “tool kit” for more regionalized thinking about transportation.

This OECD document echoes points from the economic development plan for Chicago that Mayor Rahm Emanuel introduced last week. Emanuel’s plan, produced by the nonprofit World Business Chicago, is less concerned with the tri-state area, although it does reference the “region” repeatedly. It is more streamlined than OECD’s opus, contains a fraction of the analysis and offers a more focused call to action, including a revitalization of job training programs.

We applaud these efforts to move greater Chicago toward more growth, more economic development, more jobs. The oft-sniping governors of Illinois, Wisconsin and Indiana should exploit this wealth of research.

For those of you who aren’t aware of it Illinois has more independent taxing entities than any other state in the Union. Not only are there the state, county, and city governments but there are school districts, forest preserve districts, sanitary districts and a host of other entities each empowered to levy taxes without a by your leave from the state legislature. IIRC they number more than 10,000 in all.

A less self-interested political class would be nice but I have no idea how anything short of the National Guard coming in and placing the state under martial law would accomplish that. Illinois’s constitution has very little in the way of populist measures. We have neither the initiative nor the referendum (except under severe constraints). We can’t remove elected officials from office.

Let’s do a little thought experiment. Would a more streamlined regional political authority be more or less under the influence of Chicago than the present patchwork? I think more. Over the last several decades DuPage County and McHenry County have grown enormously faster than Cook County. While I can believe that Cook County would grow faster if it were more under the control of DuPage, I am skeptical that DuPage County would have grown faster if it had been even more under the control of Cook.

Take the problems with our transportation system, for example. The mess that we refer to as our local highway system, highly effective as a storage system for cars, much less effective in facilitating transport, continues to labor under the shadow of the late Mayor Daley who insisted that any major highway pass through the city of Chicago. O’Hare, our major airport, through a masterpiece of wishful thinking and gerrymandering is technically in the city of Chicago, linked to the city proper by a tiny strip of land that extends for miles. Are the problems with the Chicago metropolitan transportation system that the city of Chicago has had too little influence or too much?

Further, I think that the view apparently expressed in the review, that the economic growth of what we refer to here as “the collar counties” continues to depend on the city of Chicago is living in the past. It was true 40 years ago but nowadays there are independent satellites: Schaumburg, Oak Brook, Naperville, Aurora, McHenry, Merrillville, and so on. These satellites have grown despite the best efforts of the city of Chicago, a counterbalance to the city of Chicago.

Going a bit farther afield I think it’s likely that Illinois could benefit by more influence on the part of Indiana but would Indiana really prosper if Illinois had more control over it? In what direction would power be likely to flow?

It’s nice to fantasize about greater cooperation among the diverse governmental entities in Illinois, Wisconsin, Indiana, and Michigan in the Chicago vicinity but the likelihood of it coming to pass is slim and, at least in my opinion the prospects if it actually came to pass bleak. What needs to happen first is reforming Illinois, reforming the city of Chicago.

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