Monthly Archives: January 2013

Some Miscellaneous Tidbits on Our Economy

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Update: And here’s the actual post [sigh]:

The Wall Street Journal a short time ago printed an updated graph that’s been around for a while; here it is:

That same article pointed out that we currently have 4.2 million fewer employed than we had four years ago—that’s the strength of the failed recovery under President Barack Obama’s policies.  Somebody else also talked (here, here, and here) about where we’d be today were this administration’s policies focused more on employment and economic recovery and less on naked redistribution and outcome equalization.

A rule of thumb, as the WSJ also notes, says that unemployment generally falls by a half per centage point for every per centage point of growth above the long-run trend.  Note, though, the graph above.  We’re not even getting back to our trend, much less getting above it.   Which emphasizes the effect of our shrinking labor force as more and more Americans continue to give up hope of changing their situation and finding an actual job.

Now, the Federal Reserve Bank has cut its long-term growth forecasts: in early 2011, they put the long-term US growth rate at 2.5% to 2.8%.  Now they’re expecting a trivial 2.3% to 2.5%–which is not going to get us back to the long-run trend, much less above it so we can start bringing down our true unemployment rate and actually get Americans back into the labor force and back to work.

Excuses

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During the Great Depression, in an effort to help farmers, the FDR administration got legislation passed that put a floor under the prices farmers could collect for their produce.  At roughly the same time, in order to help out the working man in a time of enormous unemployment (ranging from nearly 16% to over 25%), FDR got legislation passed that put a floor under the prices a man could charge for his work.  With this combination of artificially inflated food prices and a unemployment exacerbated by artificially inflated labor prices, it became exceedingly difficult for Americans to buy food for their families.

The FDR administration “cured” this, not by removing their harmful pricing controls, but by inventing and issuing food stamps—subsidies for purchasing food.

Fast forward to the present, and look at Oregon.  In an era of government mandates for fuel efficiency in our cars (not all of which originated in Oregon, to be sure), governments are seeing falling tax revenue from decreasing private sector fuel purchases.  In Oregon, in particular, though, folks are buying fuel-efficient automobiles, with some vehicles getting over 55 mpg.  The Oregon state government is looking at “curing” this, not by stimulating its economy tax and spending reductions, but instead at creating a new tax.

Beaver State lawmakers, in their upcoming session, are expected to consider legislation that would impose a charge on vehicles that get at least 55 miles per gallon of gasoline, in an effort to make up for lost gas-tax revenue[.]

After 2015, owners of these high-efficiency vehicles would either have to pay an undetermined per-mile tax calculated by GPS technology, or some alternative flat rate option.

Hmm….

Any excuse to grow government, it seems, is a good excuse to grow government.

Too Many Laws

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Here’s an example of the over-complexity that results from too many laws on our books, and of the injustice that is inflicted as a result of that over-complexity.  Jacob Gershman, writing in The Wall Street Journal‘s Law Blog describes an instance of rape that isn’t rape.

Here are two cases.  In one, a man has sexual intercourse with a woman by tricking her into believing he was, in fact, her boyfriend.  In another, a man has sexual intercourse with a woman by tricking her into believing he was, in fact, her husband.

A lower court convicted the man in the first case of rape, and an appellate court reversed—no rape had occurred.  Here’s the law on that, as described by that appellate court:

…a victim of a crime is deemed “unconscious” when he or she is “not aware, knowing, perceiving, or cognizant of the essential characteristics of the act due to the perpetrator’s fraud in fact.

But pretending to be someone else is a fraud of “inducement” not “fact.” That means that the jury couldn’t convict [the…man] on that basis[.]

A married woman, similarly tricked (differing only by the…man…pretending to be husband rather than boyfriend), would get the rape conviction, as the appellate court also pointed out in its ruling in the first case.

…California’s penal code “provides that rape includes an act of sexual intercourse ‘[w]here a person submits under the belief that the person committing the act is the victim’s spouse, and this belief is induced by any artifice, pretense, or concealment practiced by the accused, with intent to induce the belief.'”

California’s Attorney General Kamala Harris is on the case, though.

The evidence is clear that this case involved a nonconsensual assault that fits within the general understanding of what constitutes rape.  This law is arcane, and I will work with the Legislature to fix it.

Look for yet another law on the books, rather than a merging of these two laws into a single one with a unified definition of rape.

What Are They Prepared to Do?

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Kimberly Strassel asked this, and three specific questions, in a Wall Street Journal op-ed last week.

Her questions:

Question one: Do they mean it?  In the abstract, the debt ceiling is a powerful tool for forcing the president to give in to spending cuts. …

In the non-abstract, failure to raise government borrowing limits means US default—and with it potential credit downgrades, market panic and resulting economic distress.  Is the GOP willing to inflict that on the economy?  If Republican members instead run for cover, as they did with the cliff, the GOP will have been exposed as bluffers, and the administration will never again have to fear the debt ceiling.

Then,

Question two: What do they want?  Throughout the fiscal-cliff negotiations…the GOP shrunk from laying out its specific demands on Medicare, Social Security and Medicaid.

Do House Republicans have the courage to lay out big demands (say, premium support for Medicare or block grants for Medicaid), send a bill to the Senate, and sell entitlement reform to the public?  If they can’t face the demagoguery that Democrats will use against them for making substantive proposals on entitlements….

Finally,

Question three: What other hostages are Republicans willing to see shot?  Knowing he has lost his tax trump card, Mr Obama seamlessly moved on this week to the defense budget.  …Mr Obama intends to make further tax hikes the price….

Are the GOP’s defense hawks willing to stomach those cuts as a price for entitlement reform?  Having publicly campaigned against this slashing of the military, can the party stare down the president with a unified position?  Mr Obama is betting they can’t….

It’s pretty clear from the Republicans’ past performances in showdowns with Obama that all they’ll do is run for cover—too much of the party consists only of bluffers.  During the just concluded tax cliff matter, hey could have put up big demands concerning tax structure and tax rate reductions—just putting forward the Romney tax plan would have sufficed—but they quailed at the thought and shrank from their duty.  They also could have put up big demands concerning spending cuts—just putting forward the Ryan plan would have sufficed on entitlements—and big demands concerning so-called discretionary spending (so-called because all government spending is at the discretion of the Congress).  After all, Obama was publicly willing to conclude such a “grand bargain;” the Republicans should have held him to his word.  But they failed here, also.

On the matter of selling their position to the public, it’s pretty clear the Republicans have no capability for that, even if they had an actual position to sell.  They’re still not talking to us.

Vernon Pinkley, on walking the Republican halls of the House (or of the Senate), might ask, “Very pretty, Speaker/Minority Leader. Very pretty.  But, can they fight?”  The answer is, “No.”

I pointed out nearby the necessary and encouraging words of a rookie Republican Senator from Texas.  Unfortunately, there’s no reason to believe there are enough more Republicans like him to accomplish much of anything.

What He Said

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Senator Ted Cruz (R, TX) has some thoughts in a Washington Post op-ed on the needed direction of the Republican Party, if it’s to recover its roots, and the mechanics of achieving that new direction.

Herewith, some excerpts.  RTWT.

Free-market policies expand opportunity, produce prosperity and improve lives, especially for those working to climb the economic ladder.

And

On the flip side, widespread economic redistribution places enormous burdens on small businesses, kills jobs and rarely helps the recipients of government largess.

Dependency is corrosive. Ask any abuela if she wants her grandchildren dependent on government. Dependency saps spirit and diminishes self-respect.

And

Americans want to stand on their own feet, and Republicans need to champion policies that enable us to do so: ownership, choice and individual responsibility.

And some mechanics for achieving that:

Republicans shouldn’t just assail excessive financial and environmental regulations; we should explain how those regulations kill jobs and restrict Americans’ ability to buy their first home.

Don’t just say no to new taxes—fundamentally reform the tax code so that every American can file his taxes on a postcard.  Eliminate the corporate welfare and complexity that enrich only accountants and lawyers.

Don’t just criticize union bosses; explain how closed shops confiscate wages and make it harder for low-skilled workers to get jobs.

Don’t talk generically about education; advocate school choice to empower parents and expand opportunity for children struggling to get ahead.

Don’t just dwell on the long-term solvency of Social Security; promote personal accounts to allow low-income Americans to accumulate wealth and pass it on to future generations.

Republicans ought to view, and explain, every policy through the lens of economic mobility.  Conservative policies help those struggling to climb the economic ladder, and liberal policies hurt them.

What he said.