Browsing the archives for the economy category.


Capitalism Sucks

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economy

Or, what’s wrong with the world today:

On the same day that United Airlines reached a settlement with Dr. David Dao, the passenger recently physically dragged off of one of their overbooked flight, Wall Street investors in American Airlines punished the company for increasing the pay of its pilots and flight attendants.

Pending finalized contract negotiations, American Airlines will increase its payment of pilots and flight attendants by a total of nearly $1 billion over the next three years, according to a report by the Associated Press. American Airlines hopes this will quell employee discontent at the fact that their pay tends to be lower than that of employees at competing airlines.

After the plan was announced on Thursday, American Airline Group Inc.’s stock dropped by 5.2 percent, reaching $43.98. …

…As Citi analyst Kevin Crissey told clients in a note, the employee pay increases are “frustrating. Labor is being paid first again. Shareholders get leftovers.

Torches and pitchforks, I say.

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Elites: Let Them Eat Mindfulness

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economy

This article about the World Economic Forum kind of blew me away. Not in a good way.

They are eager to talk about how to set things right, soothing the populist fury by making globalization a more lucrative proposition for the masses. Myriad panel discussions are focused on finding the best way to “reform capitalism,” make globalization work and revive the middle class.

What is striking is what generally is not discussed: bolstering the power of workers to bargain for better wages and redistributing wealth from the top to the bottom.   ….

…. More entrepreneurialism, mindfulness training, education focused on the modern ways of technology: These are the sorts of items that tend to get discussed here as the response to the plight of those left behind by globalization. That perhaps private equity overseers should not be paid 1,000 times as much as teachers while availing themselves of tax breaks is thinking that gets little airing here.

Mindfulness training? “You’ll still be poor, dude, but you’ll be less stressed about it!”

“There’s never been a better time to be alive, and yet we feel so glum,” Mr. Goldin said. “So many people feel anxious. So many people feel that this is one of the most dangerous times.”

 Do tell.

And yet, Mr. Goldin said, if the benefits of globalization are not spread more equitably, the world could be in for a replay of the Renaissance, an extraordinary period of scientific progress, commercial growth and artistic creativity in Europe that ultimately yielded popular resentment.

The gold leaf landing on cathedrals was not bettering the lot of the peasantry. The spices coming in from Asia were too expensive for most. The Medici family that ruled Florence was sent packing by the mob. Intellectuals were persecuted and books burned.

“We need to learn these historical lessons and realize that this is the most precious moment in human history,” Mr. Goldin said. “We need to make the choices to ensure that globalization is sustainable, that connectivity is sustainable, that we deal with the intractable problems that are worrying people.”

Yes; glad to know someone gets it.

But Mr. Goldin’s comments were merely the prelude to a conversation that was supposed to be about how to pull that off. The answers from the corporate executives who comprised a panel could be crudely boiled down to this: The people who have not benefited from globalization need to try harder to emulate those who have succeeded.

Never mind.

Abidali Neemuchwala, the chief executive officer of Wipro, the global information technology and consulting company that hosted the event along with The Financial Times — and who last year earned some $1.8 million plus stock grants worth an additional $2 million or so — said working people would have to pursue training for the jobs of the future.

“People have to take more ownership of upgrading themselves on a continuous basis,” he said.

No one can reasonably argue against the merits of training (or entrepreneurialism for that matter). The jobs of the future have not yet been invented. New skills will be required to seize them. But nowhere in the discussion was there a mention of tax policy, or addressing the soaring costs of gaining higher education, or access to health care.

You’ll like this part.

Ray Dalio, founder of the American investment firm BridgeRay Dalio, founder of the American investment firm Bridgewater Associates — who took home $1.4 billion in compensation in 2015 — suggested the key to reinvigorating the middle class was to “create a favorable environment for making money.” He touted in particular the “animal spirits” unleashed by stripping away regulations.

What does that even mean?

I’m reading this and thinking about the “austerity economics” that have visited privations on the Middle Class to atone for the mistakes of the financial elite, who apparently are Too Big To Atone. And then there’s the creepy Steve Mnuchin, nominated to be Secretary of the Treasurer.

A bank established by President-elect Donald Trump’s choice for Treasury secretary, Steve Mnuchin, once tried to foreclose on a 90-year-old Florida woman over a $0.27 payment mistake, reported Politico Thursday.

Such a prince, this guy. But this is the latest:

Steven T. Mnuchin, President-elect Donald J. Trump’s pick to be Treasury secretary, failed to disclose nearly $100 million of his assets on Senate Finance Committee disclosure documents and forgot to mention his role as a director of an investment fund located in a tax haven, an omission that Democrats said made him unfit to serve in one of the government’s most important positions.

He’s got money stashed in so many places he forget to include it all on his disclosure forms. I recommend mindfulness training.

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It Sucks to Be Poor in America

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economy

I beg to disagree

SHOULD the goal of public policy be to insure that all Americans can have good jobs — or good lives? Politicians of both parties say one thing. Policy experts of both parties say another.

Politicians routinely promise that, if elected, they will create more good jobs, which are understood to be jobs with solid wages, regular hours and, perhaps, generous employer-provided benefits. …

… Far from the campaign stops, in university and think tank offices, the emerging consensus is quite different: Americans should be able to enjoy good lives, even if they have “bad” jobs — jobs with low wages, irregular hours and no employer-provided benefits. Bipartisan experts tend to agree that the decline in employer-provided benefits and the rise of unconventional work arrangements are trends that should be accommodated, by reforms including new portable benefits and expanded income maintenance programs, like tax credits for low-income workers.

For several decades, this consensus has been reflected in what legislators have actually been doing. Slowly, incrementally, Americans have been moving away from a system in which a good job with a generous employer was the key to having a good life to a new system in which even people with low-wage jobs can have access to the basic goods and services that define a decent life in a modern society.

Seriously? From what I’ve seen, people with low-wage jobs and no benefits have access to shit. On what planet is this wondrous transformation taking place? I’m not seeing it. Here in Real World Land, those without money are just SOL. And isn’t there all kinds of data saying that financial insecurity leads to broken marriages and drug abuse and whatnot? I think there is.

Portable benefits sound fine, but how is it supposed to work? Ultimately you’d need at least some kind of government program supporting it. A national health care system would help a lot, for example.

I realize that we may be heading for a bright new future in which “jobs” are no longer the basis of the economy, but so far I haven’t seen anybody replace “jobs” with anything but rhetoric. The Earned Income Tax Credit for low-wage workers is nice (for families; if you are filing as a single adult you’re screwed), but in my experience it really doesn’t help that much. It makes the difference between barely hanging on, or not.

What do you think?

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There Is No Invisible Hand

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big picture stuff, economy

This cartoon sums a lot up for me. I remember back in the 1980s when I was living in New Jersey and looking for a decent, affordable apartment for me and two little kids. Nobody was building affordable apartments. There was much building of McMansions, yes, but there there was a shortage of decent lower-rent apartments. And every day I passed a huge, newly built industrial/office complex that was completely empty. Months went past; it remained empty. There just wasn’t that much demand for office space, I guess, or else the builders miscalculated what people would be willing to pay in rent. And I understand there’s a glut of McMansions in the New Jersey real estate market these days.

See also “The Old Suburban Office Park Is the New American Ghost Town.”

Now, proponents of Free Market capitalism will probably argue that the Free Market was not at fault; it was bankers, or the Federal Reserve, or something else that caused investment in the wrong thing. But this assumes that the Free Market is a thing that exists out in the ether somewhere entirely separate from banks and financial policy, separate from land and labor, separate from money and infrastructure.

This was published about a year ago, and I’m sorry I didn’t notice it before.

Polanyi’s core thesis is that there is no such thing as a free market; there never has been, nor can there ever be. Indeed he calls the very idea of an economy independent of government and political institutions a “stark utopia”—utopian because it is unrealizable, and the effort to bring it into being is doomed to fail and will inevitably produce dystopian consequences. While markets are necessary for any functioning economy, Polanyi argues that the attempt to create a market society is fundamentally threatening to human society and the common good.  In the first instance the market is simply one of many different social institutions; the second represents the effort to subject not just real commodities (computers and widgets) to market principles but virtually all of what makes social life possible, including clean air and water, education, health care, personal, legal, and social security, and the right to earn a livelihood. When these public goods and social necessities (what Polanyi calls “fictitious commodities”) are treated as if they are commodities produced for sale on the market, rather than protected rights, our social world is endangered and major crises will ensue.

Free market doctrine aims to liberate the economy from government “interference”, but Polanyi challenges the very idea that markets and governments are separate and autonomous entities. Government action is not some kind of “interference” in the autonomous sphere of economic activity; there simply is no economy without government rules and institutions. It is not just that society depends on roads, schools, a justice system, and other public goods that only government can provide. It is that all of the key inputs into the economy—land, labor, and money—are only created and sustained through continuous government action. The employment system, the arrangements for buying and selling real estate, and the supplies of money and credit are organized and maintained through the exercise of government’s rules, regulations, and powers.

The article goes on to argue that what we all call “deregulation” is really “re-regulation.” “Government continues to regulate, but instead of acting to protect workers, consumers, and citizens, it devised new policies aimed to help giant corporate and financial institutions maximize their returns through revised anti-trust laws, seemingly bottomless bank bailouts, and increased impediments to unionization.”

Our “socialist” mayor, Bill de Blasio, has made the creation of decent low-income housing in NYC a priority, bless him. The city needs this desperately. The “free market” doesn’t provide low income housing here. NYC is a place in which, if you build it, rich people will come and pay ridiculous amounts of money for it. But that means the “free market” only caters to them. There are new high-rise apartment buildings going up all over the place in Brooklyn; rent for a basic one-bedroom unit averages about $2,800 a month, I understand.

The people who have made free market capitalism their religion are certain that as long as government doesn’t interfere, the Holy Free Market (blessed be It) will naturally provide whatever anyone needs. But in truth the Free Market doesn’t give a hoo-haw about what people need. The Free Market will dedicate infinite resources to filling even the frivolous desires of the wealthy; everyone else is just out of luck, sometimes even for life’s necessities.

The Free Market also is wasteful and destructive, depleting resources for short-term profit without thought to the future; using up materials and resources for buildings that sit empty and consumer products that end up in landfills after only two or three years of use. The Free Market refuses to maintain infrastructure, will not safely dispose of hazardous waste unless forced to, and will not clean up the ecosystems it destroys. The Free Market would rather kill coal miners than invest in safety precautions.

Because, you see, there is no “Free Market”; there is no benevolent “invisible hand” that turns individual self-interest into common good. There are just people scrambling to make as much money as they can, and as long as a portion of those people don’t care who they hurt in the process, the results often will not be benevolent at all.

Henry Ferrell — the same guy who wrote the article quoted above — today has a post at Washington Monthly about Very Serious People. He’s talking here about foreign policy, but it applies to economic policy as well.

  1. Everyone has a mix of beliefs, some of which are right, and some wrong.
  2. Everyone co-exists in a social system that tends to value, heavily reinforce and widely disseminate some people’s beliefs while disparaging, heavily discounting, and tending to limit the circulation of certain other people’s beliefs. This bias is not random, but instead reflects and reinforces existing power structures and asymmetries.
  3. People whose beliefs are reinforced and widely circulated so that they are socially and politically influential, even when they are manifestly wrong, are Very Serious People. The system provides them with no incentives to admit error or perhaps to understand that they have erred, even when their mistakes have devastating consequences.

We’ve been fed this fantasy about “free markets” lo these many years, and the fantasy won’t die because the VSPs believe it. But from where I sit that fantasy is not just destroying lives; it’s destroying the planet.

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The Growing Anti-Capitalist Movement

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economy

Maybe it’s just me, but I’m seeing more open grumbling about capitalism than I used to. There was a time one could not say that, maybe, capitalism really doesn’t work in the long run without being shouted down. But now I see people grumbling about capitalism almost every day. Even the Pope is running around saying that the unfettered pursuit of money is the “dung of the devil.”

The problem, of course, is that capitalism doesn’t work for the masses unless you regulate the hell out of it, which the high priests of capitalism will not accept. Ironically, the past 30 years of deregulation (while celebrating the triumph of capitalism over communism) have done a bang-up job demonstrating that Karl Marx was right about one thing, at least — capitalism carries the seeds of its own destruction.

I don’t have to persuade you “regulars” why this is true, but those of you who wandered in late can read A Wealthy Capitalist on Why Money Doesn’t Trickle DownCapitalism Simply Isn’t Working and Here Are the Reasons Why, and More Compelling Evidence That Free Market Capitalism Doesn’t Work Without Government Regulation.

If the true believers of capitalism had the sense God gave cucumbers they’d be at least considering re-instating some of the old safeguards, such as the Glass-Steagall Act, to save capitalism from complete collapse someday. But they won’t. It’s against their religion. See this commentary from a blogger whom I doubt it all that wealthy —

[Sen. Bernie] Sanders moronically said to John Harwood on CNBC, “What I think is obscene [is] when you have the top one tenth of one percent owning almost as much as the bottom 90.”

That’s capitalism.  That’s our history.  That’s why  we are not Vietnam or Cambodia.  We are not the old USSR or Tiananmen Square in China.  We are successful because success is not legislated, but achieved.

And I’m sure this guy genuinely and fervently believes that allowing the nation’s wealth and resources to be hoarded by people who really don’t work for it, whom we did not elect, cannot control, and possibly wouldn’t even like much if we met them makes America strong, and he will continue to believe that as long as he is able to cling to a middle-class lifestyle. But if the nursing home dumps him on the street some day because Medicaid has been scrapped to pay for more tax cuts for the rich, he may be in for a shock.

As the current system works for fewer and fewer of us, I’m seeing more people, younger people especially, say out loud that capitalism doesn’t work. It’s not really a movement yet, but if current trends continue I think it will be in three to five years or so.

I’m seeing suggestions that government should encourage profit sharing and more stock ownership among employees. I see the Birkenstock crowd is big on something called the “sharing economy,” which I take it means you can rent out your stuff when you’re not using it. But it seems to me these are band-aids, not cures.

On the other hand, economic adviser Jeremy Rifkin says that capitalism is about to experience  “the most exquisite of deaths.”

“We are seeing the final triumph of capitalism followed by its exit off the world stage and the entrance of the collaborative commons,” Rifkin predicts.

This is not socialism but an entirely new economic model. That sounds exciting, but what the hell is it? I’ve read the piece and cannot make sense of it. But maybe some of you will.

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A Global Disaster

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economy, Europe

Paul Krugman is calling the European summit agreement on Greece “the sacking of Athens.” He said, gloomily, “So we have learned that the euro is a Roach Motel — once you go in, you can never get out. And once inside you are at the mercy of those who can pull your financing and crash your banking system unless you toe the line.”

See also Krugman’s blog posts “Faithocrats,” “The Pause of 2014,” “An Unsustainable Position,” and “History Lessons for Euro Debtors,” which together make about as good a primer on the Greek situation that there is. See also Ivan Krastev, “A Greek Farce.”

The immediate impact of the Greek agreement is calmer markets, defeated Greeks and skeptical Germans. So should Europe celebrate? Do European leaders expect Greece to be transformed by the accord as Central Europe was transformed in the 1990s? Is it possible that the whole referendum episode — a resounding public “no” followed by Mr. Tsipras’s climb-down with the creditors — could serve not to humiliate Greek voters but instead to re-educate them?

While many in Brussels are hoping that the Greeks have learned, it is more than likely that the new reform package agreed to on Monday will result in further radicalization of certain segments of the European left and the spread of apathy in Greece.

Mr. Tsipras’s leftist populism failed to win Greece a better deal. Instead, the real political winner is most likely to be not the moderate center but the anti-European right. And while European leaders can congratulate themselves on keeping the Union going, the price that Europe will pay for saving Greece economically and losing it politically is the transformation of the Union from a project sustained by hopes and aspirations into one surviving on shared fears and confusion.

Krugman says in “Faithocrats,”

But let me note, as I have before, that what Europe calls technocrats aren’t people who know how the world works; they’re people who subscribe to the approved fantasies, and never change their minds no matter how badly wrong things go. Despite the overwhelming evidence that austerity has exactly the dire effects basic textbook macro says it will, they cling to belief in the confidence fairy. Despite a striking lack of evidence that “structural reform” delivers much of a growth boost, especially in an economy suffering from a huge output gap, they continue to present structural reform — mainly in the form of disempowering workers — as a sovereign remedy for all ills. Despite a clear record of past failure, they continue to push for asset sales as a supposed answer to debt overhang.

In short, what Europe usually means by a “technocrat” is a Very Serious Person, someone distinguished by his faith in received orthodoxy no matter the evidence.

Structural reform in the form of disempowering workers sounds pretty much like what the Republicans want to impose on us, here.  Faith-ocratism will be our doom.

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Greece: Don’t Back Down

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economy, Europe

While most of the world is cluck-clucking about how Greece needs to play by the rules and do what it’s told, a whole lot of economists are saying something else entirely.

Thomas Piketty et al.:

The never-ending austerity that Europe is force-feeding the Greek people is simply not working. Now Greece has loudly said no more.

As most of the world knew it would, the financial demands made by Europe have crushed the Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175 percent of GDP. The economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.

The humanitarian impact has been colossal—40 percent of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50 percent. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. The Greeks have complied with much of German Chancellor Angela Merkel’s call for austerity—cut salaries, cut government spending, slashed pensions, privatized and deregulated, and raised taxes. But in recent years the series of so-called adjustment programs inflicted on the likes of Greece has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.

Paul Krugman:

It’s now clear, or should be clear, that the Greek program was doomed to failure without major debt relief; no matter how hard the Greeks tried, austerity would shrink GDP faster than it reduced debt relative to the baseline, so that the debt situation was bound to worsen even as the attempt to balance the budget imposed vast suffering.

And there was no good, or even non-terrible, answer given Greece’s membership in the euro.

But there’s a broader lesson from Greece that is relevant to all of us — and it’s not the usual one about mending our free-spending ways lest we become Greece, Greece I tell you. What we learn, instead, is that fiscal austerity plus hard money is a deeply toxic mix. The fiscal austerity depresses the economy, and pushes it toward deflation; if it’s accompanied by hard money (in Greece’s case the euro, but a fixed exchange rate, a gold standard, or any kind of obsessive fear of inflation would do the trick), the result is not just a depression and deflation, but quite likely a failure even to reduce the debt ratio.

Joseph Stiglitz:

I don’t believe Europe’s leaders were seeking to punish Greece. They were just using bad models — evidenced by the enormous gap between what they thought would happen and what did happen. Europe and the International Monetary Fund predicted a fairly quick turnaround. The reality was deepening recession.

And it wasn’t because Greece didn’t do what it was supposed to; it was because it did. On the all-important macroeconomic front, Greece had the biggest and fastest fiscal consolidation among the advanced European economies in the aftermath of the global financial crisis, ruthlessly cutting back expenditures and raising new revenues. …

…The ball is now in the court of European leaders. The question is, will they stick with a policy that has proved a disaster? Or will they combine a desire to preserve the euro with good economic policies and a respect of democracy? Can they reform the reform package sufficiently?

This is the moment to stand up against unthinking austerity. Four years ago, as the first signs of the failure of this policy emerged, Europe’s leaders recognized that what was needed was a growth strategy. They promised Greece that. They didn’t deliver. There was just more of the same.

(Weirdly, but typically, the lesson Stephen Moore of Fox News draws from the Greece example is that socialism has failed. WTF?)

Exactly what’s to be done to turn the Greek economy around is hard to say, but Piketty et al. lay out a broad outline:

Right now, the Greek government is being asked to put a gun to its head and pull the trigger. Sadly, the bullet will not only kill off Greece’s future in Europe. The collateral damage will kill the Eurozone as a beacon of hope, democracy and prosperity, and could lead to far-reaching economic consequences across the world.

In the 1950s, Europe was founded on the forgiveness of past debts, notably Germany’s, which generated a massive contribution to post-war economic growth and peace. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover, and allow Greece to pay off a reduced burden of debt over a long period of time. Now is the time for a humane rethink of the punitive and failed program of austerity of recent years and to agree to a major reduction of Greece’s debts in conjunction with much needed reforms in Greece.

To Chancellor Merkel our message is clear; we urge you to take this vital action of leadership for Greece and Germany, and also for the world. History will remember you for your actions this week. We expect and count on you to provide the bold and generous steps towards Greece that will serve Europe for generations to come.

We’ll see if they can put aside the Austerity Mystique and do what really needs to be done.

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Time for Hunger Games

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economy

Paul Krugman tries to explain that not all Americans have trust funds.

We seem to be hearing less these days about cutting Social Security, and we’re even seeing some attention paid to proposals for benefit increases given the erosion of private pensions. But my sense is that Washington still has no clue about the realities of life for those not yet elderly. Which is where that Federal Reserve study comes in.

We learn, for example, that 3 in 10 nonelderly Americans said they had no retirement savings or pension, and that the same fraction reported going without some kind of medical care in the past year because they couldn’t afford it. Almost a quarter reported that they or a family member had experienced financial hardship in the past year.

And something that even startled me: 47 percent said that they would not have the resources to meet an unexpected expense of $400 — $400! They would have to sell something or borrow to meet that need, if they could meet it at all.

 His point is that most of our policy maker are utterly oblivious to the realities of life for these Americans. But maybe they can learn from reality television

On Wednesday, CBS debuted “The Briefcase,” a show in which, as Reality Blurred’s Andy Dehnart explains, “two poor families get $101,000 and have to decide whether to keep it or give it to a needy family, not knowing that family is making the same decision.” He notes it is produced by “Biggest Loser” creator Dave Broome’s 25/7 Productions and Sony, so you know that there’s some experience exploiting desperate people built in to the thing….

… In Vulture, Margaret Lyons does a ferociously great job explaining exactly why the show’s “altruism pornography” is so repulsive, starting with the fact that “In the 2014 fiscal year, Les Moonves, president and CEO of CBS Corp, earned over $54 million…. There’s something really perverse about Les Moonves earning money based on the emotional and financial anguish of poor people, by making a game-theory spectacle of human suffering that he could end, himself, personally, if he wanted to.”

At least they don’t have to kill each other. Yet.

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The Seattle Restaurant Crisis

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economy

You may not have heard of the Seattle Restaurant Crisis, unless you are a regular consumer of rightie media. In which case you would know that restaurants in Seattle are going the way of video stores, or dinosaurs, or something, because the minimum wage was raised to $15 an hour.

Except that isn’t happening. The Sky Valley Chronicle reported,

The blogosphere has once again proved itself to a be fertile source of false news that projects outward as fact at the speed of light.

A March 17th report by the Seattle Times says it found a blogosphere-spread rumor masquerading as fact that recent Seattle restaurant closures may have been linked to the city’s new $15 minimum wage, was false.

The report says an article that made its way into Seattle Magazine (called “Why Are So Many Seattle Restaurants Closing Lately?”) suggested that the city’s newly approved $15-an-hour minimum wage (to be phased in over years) was a factor in some recent Seattle restaurant closures.

That article then caught on fire and was touted as factual in the conservative blogosphere, with the Washington Policy Center (which calls itself a “think tank”) asserting that “Seattle’s $15 wage law a factor in restaurant closings.”

From there the not-real-news flashed over into a veritable forest fire of condemnation in the conservative media with the conservative American Enterprise Institute claiming that,“Seattle’s new minimum wage law takes effect April 1 but is already leading to restaurant closings and job losses.”

That was followed by elderly conservative radio talker Rush Limbaugh, not exactly known in most journalistic circles for being a hotbed of factual, non-biased material jumping on the bandwagon followed by the New York Post running an article called called “Jobless in Seattle.”

Then Forbes chimed right in with,“We Are Seeing The Effects Of Seattle’s $15 An Hour Minimum Wage.”

To Forbes’s credit, it also published a story by Rick Ungar that pooh-poohed the whole thing.

But that was last month. This month Think Progress followed up and confirmed that (a) Seattle restaurants are opening and closing and the same rate they opened and closed for years; and (b) those that closed did not cite the minimum wage hike as a factor.

High-profile writers confidently proclaimed that Seattle’s once-proud restaurant scene was in retreat and that the wage hike was already chilling business activity and killing jobs, based on one anecdotal report. None of that was true. When the Seattle Times asked them about the story, the restaurant owners in questionlaughed off the claim that their decisions were motivated by the wage law. But even that direct testimony didn’t stop the media wave all the way. The conservative National Federation of Independent Business ran a post parroting the disproven restaurant closures claim days after the Times debunked the anecdote underlying the narrative.

Now, there’s even harder evidence that the right was wrong. The Big Picture pulled the numbers on how many restaurant permits have been issued by the city each month going back to the start of 2012. The chart shows plenty of ups and downs – what data scientists call “noise” – but the 12-month average for permits is almost perfectly steady…

A couple of restaurants had added a 2 percent “Seattle Ordinance Wage Equity Surcharge,” but canceled this when customers objected.

However, the facts hardly matter, and you can be sure that the wingnuts will continue to tell themselves that every restaurant in Seattle has closed or is about to, and ha ha those stupid libtards are stupid.  You know the tune, I’m sure.

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Explaining Away Competence

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economy

A Krugman blog post got me thinking —

Everyone in the Republican Party knows that Reagan presided over an economy that has never been equaled, before or since. When I was on TV with Rand Paul, he confidently declared

When is the last time in our country we created millions of jobs? It was under Ronald Reagan …

Of course, it’s not true …

Krugman goes on to say there was better job growth during the Clinton years, and President Obama hasn’t done that badly, either. But it isn’t just Republicans who somehow think only Republicans understand the economy. Polls going way back show that The Average Voter thinks that Republicans are better on the economy (and defense, and taxes) than Democrats.

And why do so many people think that, when it demonstrably isn’t true (and it isn’t)? IMO because Republicans declare it to be so, loudly and often, and Dems don’t stand up to them about it.

Last year some Princeton economists came out with a study that showed a rather startling gap between Dem and GOP administrations in how the economy performed, going back to World War II.

“The U.S. economy not only grows faster, according to real GDP and other measures, during Democratic versus Republican presidencies, it also produces more jobs, lowers the unemployment rate, generates higher corporate profits and investment, and turns in higher stock market returns. Indeed, it outperforms under almost all standard macroeconomic metrics.”

As I said, this came out last year, and I don’t recall seeing it at the time. But the differences are not minor. There’s a bar graph at the link above showing substantial differences in economic growth between D and R administrations. But the two articles I found about this, one by Chris Matthews (the one linked above) and the other by Robert Samuelson, both go to great lengths to not give Dems credit for being better on the economy. Samuelson is particularly brilliant —

If Republican presidents were saddled with most recessions, their growth and job creation records would naturally be worse. And that’s what the Blinder-Watson study shows. Since the late 1940s, the economy has spent about 12 years in recession. But 10 of those 12 years occurred under Republican presidents; only two occurred under Democrats. On average, the economy spent slightly more than a year in recession for each Republican term and only three months for each Democratic term.

If only Republicans hadn’t been saddled with those damn recessions!

To be fair, Samuelson explains that Dems focus on job growth while Republicans focus on reducing inflation. But inflation hasn’t been a problem since the 1980s. What’s their excuse since?

Economic policies pleasurable in the present can be disastrous for the future — for example, the inflationary policies of the 1960s. Similarly, the policies that fed the economic booms of the 1990s and the early 2000s spawned overconfidence that fostered the financial crisis.

The financial crisis was caused by the Clinton boom, in other words. It’s always the Dems’ fault.

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