Posts

Rolling Stone’s Advice to Millennials: Embrace Communism

/17 Comments/in , /by

Photo Credit: Patrick T. Fallon/Bloomberg via Getty Images

Photo Credit: Patrick T. Fallon/Bloomberg via Getty Images

Five Economic Reforms Millennials Should Be Fighting For

It’s a new year, but one thing hasn’t changed: The economy still blows. Five years after Wall Street crashed, America’s banker-gamblers have only gotten richer, while huge swaths of the country are still drowning in personal debt, tens of millions of Americans remain unemployed – and the new jobs being created are largely low-wage, sub-contracted, part-time grunt work.

Millennials have been especially hard-hit by the downturn, which is probably why so many people in this generation (like myself) regard capitalism with a level of suspicion that would have been unthinkable a decade ago. But that egalitarian impulse isn’t often accompanied by concrete proposals about how to get out of this catastrophe. Here are a few things we might want to start fighting for, pronto, if we want to grow old in a just, fair society, rather than the economic hellhole our parents have handed us.

1. Guaranteed Work for Everybody

Unemployment blows. The easiest and most direct solution is for the government to guarantee that everyone who wants to contribute productively to society is able to earn a decent living in the public sector. There are millions of people who want to work, and there’s tons of work that needs doing – it’s a no-brainer. And this idea isn’t as radical as it might sound: It’s similar to what the federal Works Progress Administration made possible during Roosevelt’s New Deal, and Dr. Martin Luther King, Jr. vocally supported a public-sector job guarantee in the 1960s.

A job guarantee that paid a living wage would anchor prices, drive up conditions for workers at megacorporations like Walmart and McDonald’s, and target employment for the poor and long-term unemployed – people to whom conventional stimulus money rarely trickles all the way down. The program would automatically expand during private-sector downturns and contract during private-sector upswings, balancing out the business cycle and sending people from job to job, rather than job to unemployment, when times got tough.

Read more from this story HERE.

Economist Richard Vedder: Federal Student Loans ‘Fuel Academic Arms Race’

/0 Comments/in , /by

Photo Credit;: Mike Poresky /flickr

Photo Credit;: Mike Poresky /flickr

As combined student loan debts balloon to over $1 trillion, one economist believes enough is enough — the “tremendously explosive” student loan programs offered by the federal government need to go.

Ohio University economist and chair of Center for College Affordability and Productive Richard Vedder recommends that President Barack Obama and Congress work together to dismantle or greatly shrink the student loan programs that let young Americans rack up debt.

“I would go so far as to say that I think the federal government is more the problem rather than the solution,” Vedder told the Carolina Journal Radio during a Friday interview. “A lot of our problems… come from these tremendously explosive student loan programs and grant programs that the federal government provides.”

Giving 18-year-olds fresh from high school with no financial skills free reign to borrow hundreds of thousands of dollars may not be the best course forward, Vedder said. Colleges flush with easy money spend it on administrative pay and luxury fitness centers, increasing tuition all the while.

Read more from this story HERE.

The Great Malaise Drags On

/0 Comments/in , /by

Photo Credit: Economia

Photo Credit: Economia

In the US, median incomes have continued their seemingly relentless decline; for male workers, income has fallen to levels below those attained more than 40 years ago. Europe’s double-dip recession ended in 2013, but no one can responsibly claim that recovery has followed. More than 50% of young people in Spain and Greece remain unemployed. According to the International Monetary Fund, Spain can expect unemployment to be above 25% for years to come.

The real danger for Europe is that a sense of complacency may set in. As the year passed, one could feel the pace of vital institutional reforms in the eurozone slowing. For example, the monetary union needs a real banking union – including not just common supervision, but also common deposit insurance and a common resolution mechanism – and Eurobonds, or some similar vehicle for mutualizing debt. The eurozone is not much closer to implementing either measure than it was a year ago.

One could also sense a renewed commitment to the austerity policies that incited Europe’s double-dip recession. Europe’s continuing stagnation is bad enough; but there is still a significant risk of another crisis in yet another eurozone country, if not next year, in the not-too-distant future.

Matters are only slightly better in the US, where a growing economic divide – with more inequality than in any other advanced country – has been accompanied by severe political polarization. One can only hope that the lunatics in the Republican Party who forced a government shutdown and pushed the country to the brink of default will decide against a repeat performance.

Read more from this story HERE.

Even Mother Jones Blasts Obama Economy

/1 Comment/in , /by

Photo Credit: WND

Photo Credit: WND

That the U.S. is going through the worst economic downturn and longest unemployment crisis in generations is news to almost no one.

That a left-leaning longtime advocate for Barack Obama’s socialist policies would admit it is.

The blast at the Obama economy came this week from the far left Mother Jones, which said, “Not since the Great Depression has the United States experienced such massive and persistent long-term unemployment.”

The article, under a trio of bylines including Dave Gilson, Tasneem Raja and AJ Vicens, noted that while the Great Recession of 2007 “ended in Jun 2009,” the economy remains full of holes.

“In less than a week, emergency federal unemployment benefits for 1.3 million of these jobless Americans are set to run out. Proponents of ending the benefits argue that the economy is expanding and that the benefits prevent people from finding work,” the report explains.

Read more from this story HERE.

What Obama Got Right and What He Got Wrong on Economic Mobility

/1 Comment/in , /by

Photo Credit: Reuters

Photo Credit: Reuters

When it comes to economic mobility, the President often starts out by making some statements that Republicans and Democrats have always agreed on, such as:

While we don’t promise equal outcomes, we have strived to deliver equal opportunity—the idea that success doesn’t depend on being born into wealth or privilege, it depends on effort and merit.

The idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action.

But then he spoils it. The President’s speech at the Center for American Progress on Wednesday linked policy prescriptions for increasing economic mobility to reducing income differences in America—as though the opportunity problems facing inner-city kids are somehow because Warren Buffett has a lot of money. But not only do the facts show no link between income inequality and a lack of mobility; focusing on inequality actually distracts from the true causes of low economic mobility.

The President identified several social factors that are essential to upward mobility. “Disparities in education, mental health, obesity, absent fathers, isolation from church, isolation from community groups—these gaps are now as much about growing up rich or poor as they are about anything else.” He’s right about these things. But income redistribution will not fix these.

Read more from this story HERE.

Steyn: The Post-Work Economy

/1 Comment/in , /by

pic_giant_120613_SM_The-Post-Work-EconomyOne consequence of the botched launch of Obamacare is that it has, judging from his plummeting numbers with “Millennials,” diminished Barack Obama’s cool. It’s not merely that the website isn’t state-of-the-art but that the art it’s flailing to be state of is that of the mid-20th-century social program. The emperor has hipster garb, but underneath he’s just another Commissar Squaresville.

So, health care being an irredeemable downer for the foreseeable future, this week the president pivoted (as they say) to “economic inequality,” which will be, he assures us, his principal focus for the rest of his term. And what’s his big idea for this new priority? Stand well back: He wants to increase the minimum wage! Meanwhile, Jeff Bezos of Amazon (a non-government website) is musing about delivering his products to customers across the country (and the planet) within hours by using drones.

Drones! If there’s one thing Obama can do, it’s drones. He’s renowned across Yemen and Waziristan as the Domino’s of drones. If he’d thought to have your health-insurance-cancellation notices dropped by drone, Obamacare might have been a viable business model. Yet, even in Obama’s sole area of expertise and dominant market share, the private sector is already outpacing him.

Who has a greater grasp of the economic contours of the day after tomorrow — Bezos or Obama? My colleague Jonah Goldberg notes that the day before the president’s speech on “inequality,” Applebee’s announced that it was introducing computer “menu tablets” to its restaurants. Automated supermarket checkout, 3D printing, driverless vehicles . . . what has the “minimum wage” to do with any of that? To get your minimum wage increased, you first have to have a minimum-wage job.

In my book (which I shall forbear to plug, but is available at Amazon, and with which Jeff Bezos will be happy to drone your aunt this holiday season), I write: Once upon a time, millions of Americans worked on farms. Then, as agriculture declined, they moved into the factories. When manufacturing was outsourced, they settled into low-paying service jobs or better-paying cubicle jobs — so-called “professional services” often deriving from the ever swelling accounting and legal administration that now attends almost any activity in America. What comes next? Or, more to the point, what if there is no “next”?

Read more from this story HERE.

White House Says Food Stamps ‘Are Boosting the Economy’

/4 Comments/in , /by

Photo Credit: APPeople who depend on the government to buy their food using food stamps are boosting the economy, the White House says.

A Thanksgiving message posted on the White House website says the Supplemental Nutrition Assistance Program (SNAP)–AKA food stamps–helps millions of Americans put food on the table and keeps millions out of poverty.

In the last five years, according to the U.S. Department of Agriculture, the number of Americans on food stamps has gone up 67.7 percent.

“What’s more, SNAP is boosting the economy right now,” the infographic says. “SNAP’s effect extends beyond the food on a family’s table–to the grocery stores, truck drivers, warehouses, processing plants and farmers that helped get it there.”

The White House says every $5 in new SNAP benefits generates as much as $9 in economic activity for participating grocery stores and farmer’s markets.

Read more from this story HERE.

Comprehensive Immigration Reform Would Hurt Economy, Lower Wages

/1 Comment/in , /by

Photo Credit: APAdding millions of workers through comprehensive immigration reform would have a devastating impact to an already poor economy, according to a growing number of Republicans in Congress.

Analyses of the Senate’s “Gang of Eight” bill show that the legislation would add 30 million additional immigrants to the United States over the next decade, at a time when the number of Americans not in the labor force has reached record highs.

“Granting amnesty to untold millions of illegal immigrants will flood our job markets and reduce wages and employment for those hard-working immigrants and lower-income workers who have followed our laws,” Rep. Lou Barletta (R., Pa.) told the Washington Free Beacon.

One of the major reasons Rep. Walter Jones (R., N.C.) opposes the Senate bill is the impact it would have on the economy.

“Congressman Jones has consistently expressed his staunch opposition to the Senate bill—and any other legislation that provides a pathway to citizenship for illegal immigrants—for a variety of reasons, not the least of which is the fact that amnesty would allow individuals who have cheated the system and entered the country illegally to take jobs that could otherwise be filled by lawful citizens,” his spokesperson Sarah Howard said.

Read more from this story HERE.

Eakinomics – Mandatory Spending Crowding Out the Rest (+video)

/0 Comments/in , /by

Photo Credit: Washington Examiner American Action Forum President Douglas Holtz-Eakin is pushing back against complacency over deficits this week and calling for renewed attention to the problem of the United States’ long-term debt.

AAF, a right-leaning Washington think tank, is promoting videos of Holtz-Eakin, a former director of the Congressional Budget Office, drawing attention to the danger of rising long-term debt and calling on the federal government to cut spending, specifically mandatory spending — outlays on programs such as Social Security, Medicare and Medicaid.

The deficit for fiscal 2013 was the lowest since before President Obama took office at $680 billion, down from a high of $1.4 trillion in 2009. The broad-based sequestration spending cuts and the tax increases on high incomes that went into effect earlier in the year accounted for much of the reduction in the size of the government’s shortfall.

At $680 billion, the 2013 deficit was 4.1 percent of the country’s economic output. The Congressional Budget Office projects the deficit to keep falling, reaching 2 percent of gross domestic product by 2015. But over the longer term, as aging Baby Boomers enter retirement and draw on programs like Social Security and Medicare, deficits are expected to rise again, until the debt exceeds 100 percent of GDP in 2038.

By trying to refocus the debate on lowering the debt, Holtz-Eakin is taking on economic heavyweights like Larry Summers, Obama’s former top economic adviser, who argued in a recent Financial Times op-ed that addressing the debt should not be a priority right now.

Read more from this story HERE.

Economy Continues to Grow at a Plodding Pace

/0 Comments/in , /by

Photo Credit: NewscomThe Bureau of Economic Analysis’s (BEA) first estimate of economic growth for the third quarter of this year shows an economy that continues to grow at a plodding pace.

According to BEA, the economy grew at 2.8 percent from July 1 through September 30. This was slightly faster than the 2.5 percent the economy grew in in the second quarter of the year.

The main driver of growth in the third quarter was increased investment, the strongest component of which was a sharp climb in business inventories. Inventory accumulation could mean either that businesses didn’t sell as much as they anticipated during the third quarter or that they ramped up production in anticipation of a busy fourth quarter. Time will tell which.

Personal consumption was also a large contributor to growth. Purchases of durable goods—such as cars and home furnishings—drove the growth in consumption.

This is BEA’s first estimate of growth in the third quarter, and subsequent estimates will change.

Read more from this story HERE.