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Posts in "Economics"
June 13, 2014
Walk through the Capitol South Metro station and you’ll pass SoftBank ads that festoon the walls — but you won’t see a campaign for the 3 million people hoping Congress will pass an unemployment insurance extension.
Business groups and most big-money lobbies that typically place such advertising to influence the people working in the Capitol either oppose extending jobless benefits, or they won’t take a position.
That leaves the unemployment extension lobbying mostly to people who are out of work themselves, along with an unusual collection of Washington allies: unions, religious organizations, anti-poverty and mental health groups. Full story
May 21, 2014
In the third installment of The Purple Network’s “Opinion Duel,” Roll Call Editor-in-Chief Christina Bellantoni moderated a discussion with Charles C. W. Cooke, from National Review and The Nation’s Zoë Carpenter over the politically charged topic of increasing the minimum wage.
Carpenter contended that “even Republicans in the South” want the minimum wage raised to $10.10 an hour, but said that hike might not be enough. “There’s a lot of momentum” for legislative action, Carpenter said. Cooke took issue with the idea that raising the minimum wage would “lift people out of poverty” saying that most who currently make minimum wage are not below the poverty line. “When you’re looking at how to help people in need,” Cooke said, minimum wage is “often not the best way to do it.”
Carpenter and Cooke discussed whether labor unions and their influence have affected the debate and how the mid-term elections will affect any change this year.
September 17, 2013
Besides the prospect of a government shutdown or a default on the national debt, the most destructive aspect of the federal budget impasse is the sequester’s damage to basic scientific research, especially biomedical research.
Almost everyone agrees that across-the-board cuts in discretionary spending — which make up just a third of all federal outlays — are a poor substitute for debt reduction that includes entitlement reform.
But the continuing failure to address the debt comprehensively means that the sequester may go on indefinitely.
Many federal agencies undoubtedly can afford a 5 percent haircut without damaging the national interest. But chopping research — already underfunded — is worse than eating the nation’s seed corn. It’s like letting it wither in the fields or feeding it to the pigs.
Even though federally funded research laid the basis for the success of major employers such as Google, Sun Microsystems, Genentech and Cisco, its funding as a percentage of gross domestic product has fallen by more than 30 percent since the mid-1980s.
According to the American Association for the Advancement of Science, the budget sequester is cutting total federal research-and-development funding to below 0.8 percent of GDP, its lowest level in 40 years.
Fifteen years ago, Congress and the Clinton administration temporarily reversed the trend, doubling the budget of the National Institutes of Health in four years. George W. Bush finished the project. But the budget has been flat since 2003.
The combination of inflation plus a $1.6 billion reduction mandated this year by the sequester has cut the NIH’s research power by 20 percent. “We’re being undoubled,” NIH Director Francis Collins told me.
After the doubling, nearly a third of the qualified research ideas submitted to NIH got funded. Now, the number is down to 14 percent — a reduction of nearly 700 this year alone.
The cuts are crippling the biotechnology industry, sacrificing what has been a major U.S. job creator and world leader. They are forcing young scientists we’ve spent a fortune educating to look for other work or go overseas.
Worst of all, they’re going to kill people.
Among its research projects, the NIH has been funding work on a universal flu vaccine that could prevent a pandemic killing millions.
The sequester demands a 5 percent cut across the board at every one of the NIH’s 27 institutes and research centers, including the one concentrating on infectious diseases. So, there’s a slowdown in work on the vaccine.
In a normal year, about 40,000 Americans die from influenza and about 500,000 die worldwide. But the 1918 Spanish flu epidemic may have killed 100 million. In another such outbreak, the toll would be even higher.
Or, take cancer. Thanks in part to NIH-funded research, the U.S. cancer death rate has fallen 15 percent in the past decade and a half, but 580,000 people still die of it annually in this country.
Instead of carpet-bombing all cancers with chemotherapy, surgery and radiation, researchers are using genomics to develop personalized treatments for various kinds of cancer.
Now that work has slowed, too, because of cuts at the National Cancer Institute and the National Human Genome Research Institute.
Collins told me he has met with more than 100 members of Congress to plead for an undoing of the sequester. The Senate Democratic budget does it. Collins said that most House Republicans tell him, “‘You’re right, but there’s not much I can do.’” They certainly ought to try.
As Collins says, this could be “the century of biology,” leading to the conquest of major diseases and the development of new energy and food sources. But it won’t be America’s century if the government keeps slashing research.
September 10, 2013
Lawrence H. Summers may not be a lobbyist, but he is generating plenty of business on K Street.
His bid to take over the chairman’s seat at the Federal Reserve has created a backlash downtown among an unlikely collection of stakeholders. Religious, conservative, feminist, public interest and progressive advocates have jumped into the debate — many for the first time ever. The battle over the next nominee to chair the Fed is already unprecedented, and President Barack Obama hasn’t yet said who will get his nod.
September 6, 2013
Even though the unemployment rate dropped 0.1 percent in August, the job growth number — 169,000 — was anemic. So many people have given up looking for work that the true unemployment rate is 17.7 percent. The economy is still 1.9 million jobs short of its peak before the 2008 recession. This has been the slowest job-market recovery since World War II.
So, who’s to blame and what’s to be done?
In a provocative Wednesday column in The Wall Street Journal, editorial writer Stephen Moore points out that the groups losing the most during the so-called recovery — young voters, single women, blacks, Hispanics and people with a high school or less education — are the very groups that voted most strongly for Barack Obama in 2012. Full story
July 30, 2013
Give President Barack Obama credit for at least trying to diagnose and grapple with the economic crises of our era — slow growth, widening income inequality and diminished upward mobility.
The deeper dilemma for him and the country is that his proposed solutions — largely, government stimuli of various sorts — aren’t working and might be inadequate to counter the huge forces at play: globalization, technological change and deterioration of social capital.
As Republicans and conservative economists delight in pointing out, economic growth under Obama — averaging 2 percent a year — is the weakest for any recovery since World War II and is slowing, not accelerating. Full story
March 26, 2013
In part 1 of this post, I argued that the biggest question facing the GOP is what should it be for? Republicans have been relegated to the role of Scrooge while Democrats have been playing Santa when it comes to taxes and economic growth.
So, can the GOP find a way to play Santa again? It’s hard to do on the tax side because Obama has kept rates low for everybody but the top 1 percent and the GOP, fighting fiercely for the 1 percent, only magnifies its Scroogish image.
Actually, some bright conservative writers have proposed good ideas recently. Rich Lowry of National Review, writing in Politico last week, suggested that, in the politically entrepreneurial spirit of Kemp, the party come up with 10 ideas for promoting work in America, advancing welfare reform, replacing (not just obliterating) “Obamacare” and making college affordable.
AEI’s Ramesh Ponnuru, in The New York Times, suggested reducing payroll taxes on ordinary workers, expanding the child care tax credit and lowering health care costs by altering the tax break for health insurance by letting people pocket the money they save buying cheaper plans. Full story
March 25, 2013
Among the Republican Party’s many problems, perhaps the biggest is: what should it be for? Former Florida Gov. Jeb Bush correctly pegged the issue in his Conservative Political Action Conference speech — “stop being the anti-everything party” — but didn’t have much to offer as an alternative.
The party has confronted this problem before and met it. It was encapsulated in 1976 by the brilliant, erratic journalist-activist Jude Wanniski in an essay, “Taxes and a Two-Santa Theory,” published in the long-defunct Dow Jones newspaper, National Observer, but available here thanks to historian-economist Bruce Bartlett.
Wanniski argued that Republicans had embraced the role of Scrooge while Democrats had the pleasure (and political benefit) of playing Santa Claus, using government to dispense goodies and redistribute income. Republicans, fixated on balanced budgets, either constantly just said “no” or, in those days, insisted on raising taxes to pay for the Democrats’ spending. In a battle between Santa Claus and Scrooge, Santa wins, he wrote. Full story