Thanksgiving day fun.

by: Doug Coffin

Wed Nov 24, 2010 at 11:56:32 AM MST

The first realization is the absence of any "progressive" thinking on the horizon in the upcoming session, because there has been very little historically in Montana. Hence our traditional standing at the bottom of the national economic ladder. I consider "progressive thinking" in economic terms along the lines of Obama's "stimulus", the Fed's current QE2 program or simply investing in quality public education. Montana State government has a very limited history of state government actively spending to stimulate certain economic sectors and that won't change in the 2011 session.

All this makes me a Krugmanite (http://krugman.blogs.nytimes.com/) where I see an essential role for both federal and state government investment in certain sectors for economic stimulation and development. My career in science makes this a natural believing that there are certain places that government investment has to go, because private investors would be crazy to do so.

My favorite examples are biomedical research and the space program. No private company could ever have conceived of investing in a program to send a man to the moon or develop a space shuttle in the 20th century. Thus, it took the government to spend/invest there, but the payoff was huge. All the products (Teflon, Tang, etc., etc.) and of course a satellite fleet next to none have been the basis for our economic growth in the late 20th century. It goes without saying that the private sector is the twin to government investment where entrepreneurs mine the gold through product development and marketing. Witness how, once the technological groundwork was laid and the risk is lowered to an acceptable level, 21st century companies are moving into space. A corollary also exists between NIH funded research and the pharmaceutical or health care industries. The trick for Montana policy makers is to find our local "space program" and invest accordingly. That's not easy.

The tealeaves for the upcoming legislative session predict that GOP legislators will be off-task and most certainly tip too far in the direction of the private sector's "magic hand" by over-cutting government spending. This will only serve to starve Montana's economic growth in the long term, evidenced by their cutting educational budgets and other essential services like FWP that maintain the infrastructure for tourism. They will also pass ill-advised tax cuts to fatten corporate profits that only fly out of state. Our consignment to the bottom percentiles of the national income ladder and our legacy of being exploited by other more wealthy states and corporations will continue. Out of state corporations will continue to make money and send their profits back home (e.g. Walmart). The debilitating trend where out of state landowners buy up large ranches and lock out Montana recreationalists will only accelerate. So, if you want to make some money in Montana, invest in the orange paint business.

It's the system, stupid!

by: Jay Stevens

Sun Oct 24, 2010 at 18:37:25 PM MST

Spoiler alert! I'm going to give away the ending, so if you want to be surprised, stop reading now!

The bill failed because of a combination of partisan Republicans, commercial interests' control of Congress, and fearful Democrats with a too-steady eye on polling numbers:

In September, I asked Al Gore why he thought climate legislation had failed. He cited several reasons, including Republican partisanship, which had prevented moderates from becoming part of the coalition in favor of the bill. The Great Recession made the effort even more difficult, he added. "The forces wedded to the old patterns still have enough influence that they were able to use the fear of the economic downturn as a way of slowing the progress toward this big transition that we have to make."

..."The influence of special interests is now at an extremely unhealthy level," Gore said. "And it's to the point where it's virtually impossible for participants in the current political system to enact any significant change without first seeking and gaining permission from the largest commercial interests who are most affected by the proposed change"....

As the Senate debate expired this summer, a longtime environmental lobbyist told me that he believed the "real tragedy" surrounding the issue was that Obama understood it profoundly. "I believe Barack Obama understands that fifty years from now no one's going to know about health care," the lobbyist said. "Economic historians will know that we had a recession at this time. Everybody is going to be thinking about whether Barack Obama was the James Buchanan of climate change."

Quite the shocker, eh? Okay, maybe not. But certainly the failure of climate change legislation is the icing on the cake of the systematic failure of government, finance, and media. Sure, in DC-land, it was collateral damage in its strange Kabuki theater, but climate change is the biggest crisis we've ever faced, our response to it here and now likely determining whether our planet will be habitable for humans in the next generation or so. (Sorry, kids. A bunch of Senators didn't like the idea of hurting coal industry short-term profit.)

The sound of one hand wringing

by: Jay Stevens

Fri Oct 15, 2010 at 07:50:31 AM MST

What's interesting, though, is that if you look at public opinion on climate change, the U.S. isn't actually that much of an outlier among the wealthier Western nations. In a 2007-2008 Gallup survey on global views of climate change, for instance, just 49 percent of American told pollsters that human beings are responsible for global warming. But the same figure for Britain (where Rush Limbaugh has relatively few listeners, I believe) was 48 percent, and belief in human-caused climate change was only slightly higher across northern Europe: 52 percent in the Czech Republic, 59 percent in Germany, 49 percent in Denmark, 51 percent in Austria, just 44 percent in the Netherlands, with highs of 63 percent in France and 64 percent in Sweden. (Doubts about anthropogenic global warming are considerably rarer, the study found, in southern Europe, Latin America and the wealthier countries of Asia.)

There's a reasonably large Western European constituency, in other words, for some sort of climate change skepticism. (And probably a growing one: In Britain, at least, as in the United States, the economic slump has dampened public enthusiasm for anti-emissions regulation.) But the politicians haven't been responding. Instead, Europe's political class, left and right alike, has worked to marginalize a position that it considers intellectually disreputable, even as the American G.O.P. has exploited that same position to win votes.

That is, the Republican party is using climate change skepticism for political gain, while their political peers in Europe eschew the quick fix and are contributing solutions to "the 21st century's biggest foreign-policy challenge," as Britain's Foreign Secretary and Conservative party leader William Hague said. "An effective response to climate change underpins our security and prosperity."

It's amazing how this political opportunism has morphed into a kind of belief. Take Dave Budge's sophist argument against the entirety of climate science: apparently the body's "oligopolistic nature" is "reinforc{ing} one approach rather than foster{ing} an environment in which a variety of approaches can flourish." Yet there's no evidence offered that climate science has indeed narrowed its approach. In reality, the opposite is true. Competing theories to the origin of climate change are investigated and tested - after all, that's what science is all about. And here's all you need to know: there exists no competing and scientifically valid theory to dispute the consensus that the climate is warming beyond the range of natural trends and that the major cause is rising levels of CO2. Where there is debate is in how quickly the climate will change and to what extent, how the changing climate will manifest itself, and the extent of the negative impacts to human health it will have.

Budge, as an economically-minded kind of guy, came to his conclusion in observing that economic modeling failed to correctly predict the current financial crises - therefore, he reasons, climate modeling couldn't possibly be accurate either, the data is too complex. But the climate - unlike economics - is a deterministic system. Actions always have the same results. If you turn down the sun, it gets cooler. If a surface is white, it's cooler. If you increase the presence of a greenhouse gas in the atmosphere - CO2, water vapor, or methane, say - it gets hotter. Accuracy in modeling is easier to achieve. On the other hand, as a human institution the economy is not deterministic. Sure, there are trends, but human free will prevents predictions for the economy (similar to history, say) to be anything other than guesswork. In fact, you could argue that economic theories themselves influence the economy. It's for that reason that economics is inherently political - unlike science.

Maybe that's why so many conservatives have rushed to denialist positions in the wake of their favored party's exploitation of climate change doubt: they come at the issue, not as scientists, but as political and economic ideologues. I suspect the reason why many dislike the findings of climate science is that the free market is inadequate on its own to react to the problem climate change poses. Climate change demands a state-led response that poses great economic risk. No wonder they've taken to quivering hand-wringing...

Still, market forces are incredibly useful as a means of innovation. It's too bad our nation's conservatives have abandoned our generation's greatest challenge.

The unbearable lightness of making a quarter of a mil

by: Jay Stevens

Fri Oct 01, 2010 at 13:15:35 PM MST

...perhaps the best way to describe the social reality that Cervone is noting here is simply to abandon the idea of the United States as a predominantly middle class society. Instead, there's a smallish economic elite composed primarily of high-ranking executives and the princes of Wall Street. Then there's a much larger middle class composed, more or less, of people with college degrees like this hypothetical cop/principal couple. And then there's the working class majority with no bachelor's degree.

Which reminds me of the Chicago law professor who complained about how limiting his $500k/year household income was, and Delong astutely noting that, to the professor, no doubt his income feels limited because he compares himself to his financial betters, whose income has exploded, while his own strata has merely grown moderately.

That professor took down his post because (a) his wife disagreed with his opinion, and didn't want to share her family's financial details with the world, and (b) a lot of people gave him a cr*pload of sh*t about his views. Which is a shame, because from his viewpoint, his opinion isn't unreasonable. Still, that his family has nearly as much yearly disposable income -- after taxes, bills, household and education expenses -- as half of Montana households' total income (or the median Illinois household income, if you think geography should be factored in), shows the professor suffers from a bad case of classist myopia.

This all explains the hysteria coming from the $250K crowd, who contemplate a tax hike if Bush tax cuts for the wealthy are rolled back, and all of the "debate" on what it means to be "rich." The fact of the matter is, if you make $250k, no matter where you live, you're doing all right, much better than the vast majority if American households, for most of whom their slice of the American pie has been steadily shrinking under conservative rule.

In any case, the graph also makes it clear just who benefits from free-market economic policy. And it's in this context that raising taxes on the "ordinary" rich is unfair.

Liberty or Banana Republic

by: Jay Stevens

Fri Sep 24, 2010 at 12:39:25 PM MST

In the 1980s, fewer than a third of Americans received some sort of government benefits. That figure has risen to about 50 percent, The Wall Street Journal reported last week. At the same time, 45 percent of Americans pay no federal income taxes.

If these trends are not reversed, we can kiss the United States of America goodbye. We will soon reach a point at which most of the people have their standard of living subsidized by the earnings of a quarter, or maybe a fifth or fewer, of the rest. No nation can sustain the economic and cultural strength that has graced the United States while transferring so much wealth from so few to so many.

Where to begin? How about with the fact that those paying no federal income tax are still paying taxes, and usually at much higher rates than those in the upper tax brackets? Sales taxes, property taxes, the payroll tax, gasoline tax, fees, all of these are essentially flat taxes, which impact those with lower incomes much more than those with more, so much so that many working-class Americans are paying a higher percentage of their earnings in taxes than the richest among us.

Second, the growing numbers of Americans slipping out of the tax brackets is a symptom of the growing divide between rich and the rest of us, not the machinations of a greedy underclass. The causes of unequal income distribution is hotly disputed, but it's likely it was spurred in large party by a more pro-corporate conservative US fiscal policy, the decline of unions, the implementation of  free trade policies, and a whacked-out wage system that unjustly rewards a small and select group of self-anointed superstar corporate executives. That's right: the socio-political trend that's pushing more Americans into poverty is a result of free-market greed and insane economic policy. We are a nation that has come to worship greed and material consumption.

So, yeah. Whoever wrote this editorial is blaming the poor for their own misfortune, while urging us all to suck up more to the ueber-rich and free them from the disastrous consequences of their own self-serving and destructive policies.

No thanks.

The wretched of the earth

by: Jay Stevens

Tue Sep 21, 2010 at 06:32:09 AM MST

Like most working Americans, insurance, doctors' bills, utilities, two cars, daycare, groceries, gasoline, cell phones, and cable TV (no movie channels) round out our monthly expenses. We also have someone who cuts our grass, cleans our house, and watches our new baby so we can both work outside the home. At the end of all this, we have less than a few hundred dollars per month of discretionary income. We occasionally eat out but with a baby sitter, these nights take a toll on our budget. Life in America is wonderful, but expensive.

My first reaction to a guy who whines about his disposable income after sending his kids to private school and paying out the monthly wages of his gardener and nanny resembles Michael O'Hare's, who notes that the professor's income is around $400-500K, which, after student loans, taxes, and mortgage payments, leaves his family $245 a day:

The next time you come upon a Chicago law professor in his scuffed Gucci loafers and tattered Armani on the sidewalk, holding up his libertarian down-with-government sign and shaking his tin cup to get his doctor wife and hollow-eyed waifs through another tough week in their million-dollar hovel, please don't just walk by. Remember, it could be you. Be a mensch: throw a nice shiny 3/8-inch washer and couple of nickel slugs in there, with my blessings.

It's worth mentioning that O'Hare points out the prof's biggest expense is not "financing government," as he claims: his expenditures on "private consumption" outweigh taxes 3-to-1. The professor is also "choosing not to divide his public expenses into, say: education, policing, national defense, fire protection, keeping his street paved, subsidies to corn farmers and oil companies, etc."

Brad Delong takes the more charitable view, noting that the professor probably does feel he's living like "most working Americans," and living from paycheck to paycheck.

But first, a "reality check" from Delong. "The median household income in the United States today is $50,000." Which means that the professor and his doctor wife make nine times that amount. "The Hendersons are solidly in the top 1% of American households," notes Delong, "by any standard, they are really rich." So why does the professor get off on thinking he's entitled to more?

And here is the dirty secret: Professor Henderson thinks that that is the way things should be because he knows people for whom that is the way it is....

...He doesn't say: "Wow! My real income is more than twice the income of somebody in this slot a generation ago! Wow! A generation ago the income of my slot was only twice that of somebody at the bottom of the 10% wealthy, and now it is 3 1/2 times as much!" For he doesn't look down at the 99% of American households who have less income than he does. And he looks up. And when he looks up today he sees as wide a gap yawning above him as the gap between Dives and Lazarus. Mr. Henderson doesn't look down.

Instead, Mr. Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them--widening income inequality over the past generation has excluded him from the rich who truly have money.

And this makes him sad. And angry. But, curiously enough, not angry at the senior law firm partners who extract surplus value from their associates and their clients, or angry at the financiers, but angry at... Barack Obama, who dares to suggest that the U.S. government's funding gap should be closed partly by taxing him, and angry at the great hordes of the unwashed who will receive the Medicare, Medicaid, and Social Security payments that the government will make over the next several generations.

Also note that the professor responded to O'Hare's post on Delong's site, noting that, after his kids' private school tuition, he has far less than $245/day in spending money. It's more like "$80 per day for five people."

Which comes to $31,360 a year.

After taxes, after household expenses, after mortgage payments, loan payments, and retirement savings.

Cry me a river.

The wretched of the earth

by: Jay Stevens

Tue Sep 21, 2010 at 06:30:58 AM MST

Like most working Americans, insurance, doctors' bills, utilities, two cars, daycare, groceries, gasoline, cell phones, and cable TV (no movie channels) round out our monthly expenses. We also have someone who cuts our grass, cleans our house, and watches our new baby so we can both work outside the home. At the end of all this, we have less than a few hundred dollars per month of discretionary income. We occasionally eat out but with a baby sitter, these nights take a toll on our budget. Life in America is wonderful, but expensive.

My first reaction to a guy who whines about his disposable income after sending his kids to private school and paying out the monthly wages of his gardener and nanny resembles Michael O'Hare's, who notes that the professor's income is around $400-500K, which, after student loans, taxes, and mortgage payments, leaves his family $245 a day:

The next time you come upon a Chicago law professor in his scuffed Gucci loafers and tattered Armani on the sidewalk, holding up his libertarian down-with-government sign and shaking his tin cup to get his doctor wife and hollow-eyed waifs through another tough week in their million-dollar hovel, please don't just walk by. Remember, it could be you. Be a mensch: throw a nice shiny 3/8-inch washer and couple of nickel slugs in there, with my blessings.

It's worth mentioning that O'Hare points out the prof's biggest expense is not "financing government," as he claims: his expenditures on "private consumption" outweigh taxes 3-to-1. The professor is also "choosing not to divide his public expenses into, say: education, policing, national defense, fire protection, keeping his street paved, subsidies to corn farmers and oil companies, etc."

Brad Delong takes the more charitable view, noting that the professor probably does feel he's living like "most working Americans," and living from paycheck to paycheck.

But first, a "reality check" from Delong. "The median household income in the United States today is $50,000." Which means that the professor and his doctor wife make nine times that amount. "The Hendersons are solidly in the top 1% of American households," notes Delong, "by any standard, they are really rich." So why does the professor get off on thinking he's entitled to more?

And here is the dirty secret: Professor Henderson thinks that that is the way things should be because he knows people for whom that is the way it is....

...He doesn't say: "Wow! My real income is more than twice the income of somebody in this slot a generation ago! Wow! A generation ago the income of my slot was only twice that of somebody at the bottom of the 10% wealthy, and now it is 3 1/2 times as much!" For he doesn't look down at the 99% of American households who have less income than he does. And he looks up. And when he looks up today he sees as wide a gap yawning above him as the gap between Dives and Lazarus. Mr. Henderson doesn't look down.

Instead, Mr. Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them--widening income inequality over the past generation has excluded him from the rich who truly have money.

And this makes him sad. And angry. But, curiously enough, not angry at the senior law firm partners who extract surplus value from their associates and their clients, or angry at the financiers, but angry at... Barack Obama, who dares to suggest that the U.S. government's funding gap should be closed partly by taxing him, and angry at the great hordes of the unwashed who will receive the Medicare, Medicaid, and Social Security payments that the government will make over the next several generations.

Also note that the professor responded to O'Hare's post on Delong's site, noting that, after his kids' private school tuition, he has far less than $245/day in spending money. It's more like "$80 per day for five people."

Which comes to $31,360 a year.

After taxes, after household expenses, after mortgage payments, loan payments, and retirement savings.

Cry me a river.

Rough Labor Day News

by: Matt Singer

Mon Sep 06, 2010 at 07:05:39 AM MST

Missoula managed to slide less than the national average, but still say a decline. Billings slid .1% more than the national average. Great Falls actually managed to buck the trend but only barely.

The Fed and Congress should act. This country still needs more stimulus. Inflation is not a risk right now. Years of a stagnant economy is a very real one.

At least he knows it's real

by: Jay Stevens

Thu Aug 26, 2010 at 09:41:28 AM MST

In the article he wrote for the {American} Prospect's first issue, Schlesinger observed that many people believe politics is about power, while others think it is about image, and he granted there is some truth in both of those views. But in a democracy, he continued, politics is "above all about the search for remedy."

The Democrats will lose ground this year because they've failed to provide economic remedies fast enough. But the long-run problem for Republicans is that remedy is not what they have been offering -- not for health care, for which they barely offer even the pretense of a solution; not for the recession, which their ideas would aggravate; not for immigration, one of several issues they want to exploit without facing up to the facts; not for climate change, which many of them entirely deny; not for energy, where their favorite response, as summed up in the chant, "Drill, baby, drill," was drowned in the Gulf oil spill. Events like the financial collapse and the oil spill keep reminding people that they need a competent and activist government to rein in the market. Unless conservatives abandon ideological fantasy and denial and become a responsible partner in government, progressives will dominate the search for remedy. And if that is what political tug-of-war is all about, we will ultimately win it.

I don't share Starr's optimism that progressive remedies will eventually carry the day. After all, democracy's not even safe. Just a glance at Tea Party rhetoric, where the democratic process is called "tyranny" on the basis of distorted interpretations of 18th-century political theory and accompanied by overt threats of violence - "gather your armies!" - hints at what could be. I could imagine a world where a political party rides right-wing populist racism and xenophobia to elected office...

In short, if there's one lesson I've learned since mucking around in politics, it's that good ideas don't always win the day.

Still Starr's right: only Democrats have actually tried to solve the problems we face, economically, environmentally, and in foreign policy. We may not like the policies they craft in Congress - too slavish towards established institutions and big corporations - but at least they have policies. Don't believe me? Check out this post from Montana PSC candidate Travis Kavulla on global warming:

So what's the solution? Manzi suggests that there is no obvious solution in the here-and-now, and that whatever solution is out there almost certainly has not been invented yet. I agree. Manzi's recipe is investment, not mandates or carbon taxes or the creation of artificial shortages. And I tend to agree that anything that tries to make renewables more competitive by lowering their cost is a much better option as opposed to the self-defeating path of raising the price of carbon-based fuels for only some consumers in only some parts of the world.

So the answer is...do nothing? At least Kavulla acknowledges climate change is real. And it's pathetic, really, that he gets kudos for that, showing as it does how neanderthal most conservatives' views are on the topic.

First of all, Manzi based his do-nothing conclusion on the premise that "global warming...is expected to have only a marginal impact on the world economy." Of course, folks in Montana already know this isn't true. The region's mountain pine beetle infestation is a direct result of climate change, as is the West's prolonged fire season, which accounted for an increase in the federal firefighting budget of about 1.5 billion dollars a year (pdf) from 2000 to 2005. That is, climate change has likely already cost the American taxpayer in excess of 10 billion dollars in firefighting costs alone in the past decade. And that's not even mentioning the hit in tourism revenue, and the health costs and decline of worker productivity due to fire-related air pollution.

And the rise of global temperatures is just beginning. Wait a century.

As for Kavulla and Manzi eschewing a carbon tax or cap-and-trade, which would raise the cost of fossil-fuel-based energy sources, and reliance on white-hat investment into alternative energy technologies, they seem to forget that investment follows incentive. If carbon-emitting energy becomes more expensive, consumers will demand alternative-energy sources and energy efficient homes, cars, and appliances, mass transit and bike lanes, and livable, walkable neighborhoods. The revenue collected from a carbon tax can build the new green infrastructure. And consumers eventually save money by using energy more efficiently, using less of it.

Which is another way of saying there is plenty we can do, right now. We don't have to pawn off the problem onto some unknown, future technology, and force our children and children's children to muster the courage and determination to deal with environmental catastrophe. Some of us have the courage and determination here and now.

Solving the Demand-Side Problem

by: Matt Singer

Tue Aug 24, 2010 at 09:43:16 AM MST

Corporate profits are soaring. Companies are sitting on billions of dollars of cash. And still, they've yet to amp up hiring or make major investments -- the missing ingredients for a strong economic recovery.

Many Democrats say the economy needs more stimulus. Business lobbyists and their Republican allies say it needs less regulation and lower taxes.

But here in the heartland of America, senior executives say neither side's assessment fits.

They blame their profound caution on their view that U.S. consumers are destined to disappoint for many years. As a result, they say, the economy is unlikely to see the kind of almost unbroken prosperity of the quarter-century that preceded the financial crisis.

This is a textbook case for Keynesian economics. Hilariously, though, the Post makes the claim that this isn't really about stimulus.

This isn't rocket science, though. I've gotten more cautious in my spending. I'm working to pay down my debt. So are millions of others. But if we want to figure out what it would take for me to drive fewer dollars into savings or paying off debt, ask me or the millions of other people out there who are engaging in this altered behavior.

More money in the economy would do it. Almost certainly. And there are ways for either the Fed or the Congress to inject more money into the economy. In fact, they could do it by borrowing the money that consumers like myself are putting back into savings.

If our economy comes back in an altered state, that's good. If we have more money going to CSAs, organic farmers, and gardening supply companies and tool libraries and less going to underwrite crap food chains, that's awesome. If we have more money going into savings and less into purchases of unnecessary crap, that's awesome. Economic transitions are, of course, painful. But we don't need to insist that this one be more painful than necessary.

A call for "small-government egalitarianism" from an unusual place

by: Jay Stevens

Tue Jul 13, 2010 at 08:39:25 AM MST

This policy is typical of the way the federal government does business. In case after case, Washington's web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as "family farms" and "clean energy" firms that aren't energy-efficient at all. We give tax breaks to immensely profitable corporations that don't need the money and boondoggles that wouldn't exist without government favoritism....

All of this ought to be grist for a kind of "small-government egalitarianism," in the economist Edward Glaeser's useful phrase, that seeks to shrink government by attacking Washington's wasteful spending on the well-connected....conservatives need to recognize that the most pernicious sort of redistribution isn't from the successful to the poor. It's from savers to speculators, from outsiders to insiders, and from the industrious middle class to the reckless, unproductive rich.

The Corner's Ramesh Ponnuru adds, "a reform that made the federal government more redistributive, but smaller and more efficient, would be worthwhile."

Uh, yes, it would. And you can kiss goodbye those cushy box seats in a conservative think tank they were warming for you fellas.

Seriously, this is essentially what I was ranting about the other day. Douthat does try to bring his argument back to conservative talking points now and then -- for example, he does rail against liberals' inclination to want to raise taxes on the rich, although I'd argue that we want to level taxes on the rich, simply ensuring that they pay the tax rates assigned to them. No loopholes, no tax havens, and their income taxed at the same rates as, say, mine.

In any case, it's nice to see conservatives understand that income inequality exists, and that our economic system unfairly favors the wealthy. Usually do conservatives not only care (if they recognize this unfairness), they do everything they can to rig the system for the rich.

Getting America Back to Work

by: Matt Singer

Fri Jul 02, 2010 at 08:44:46 AM MST

Paul Krugman, Nobel prize winning economist:

We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost - to the world economy and, above all, to the millions of lives blighted by the absence of jobs - will nonetheless be immense.

And this third depression will be primarily a failure of policy. Around the world - most recently at last weekend's deeply discouraging G-20 meeting - governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.

[...]

And who will pay the price for this triumph of orthodoxy? The answer is, tens of millions of unemployed workers, many of whom will go jobless for years, and some of whom will never work again.

Face it: The private sector's job-creating machine is dead in the water. The private sector created only 83,000 jobs last month. That's better than losing 700,000 jobs a month, as we were when Bush left office, but it's not enough to put America back to work. And unless Americans are earning paychecks and spending to pump fuel into our economy, there's not going to be a continued recovery.

But every effort to dig us out of our 10.5 million jobs hole is being stymied by budget hysteria. And it is hysteria. I'm not saying the federal budget doesn't need attention--it does, but over the long term. Right now we have an immediate jobs crisis. And unless we address it now, we'll only make the nation's economic conditions worse.

This is rambling now, but the bottom-line is the same: the political philosophy of the TEA Party, copied by so many members of our Congress currently, is a recipe for the destruction of our nation in both the short- and the long-term, as it drags out our current recession and lays the groundwork for the decline of our nation by failing to make the basic investments in our people and our infrastructure that we will need to have a competitive economy.

Despite winning everything over the past several years, too many Democratic leaders still act like sad sack losers who got the shit kicked out of them. They've been predicting their own defeat for every election of their lives. And the started anticipating defeat this fall basically when the last Congress started.

Why Inequality May Lead to Instability

by: Matt Singer

Tue Jun 29, 2010 at 11:29:05 AM MST

The barest outline of a case that there is such a link is that you have two giant increases in inequality, one that ended with the Great Depression and one that ended with the current recession. The barest outline of a case against the existence of such a link is that it's hard to understand what the causal mechanism here.

It is quite possible for us to confirm that something occurs without us understanding why or how it does (e.g. gravity).

But what I found interesting was an explanation that inequality appears to be correlated to debt, which in turn may trigger economic collapse.

But this only looks at half the problem. Inequality presumable causes some people to have lower relative salaries than they would in a more equal world. In fact, that's probably the very working definition of inequality in this case. That leads them to borrow. But they need to find people to borrow from. And something else that happens with inequality is that some people have relatively more money than they would otherwise have. And they have to find places to put that money.

Is it any surprise that the rise of inequality also saw an explosion in financial "innovations" that ostensibly better avoided risk while making riskier investments.

In other words, inequality triggers riskier lending and riskier borrowing because of both a larger supply of capital and amped up demand. The demand is also exacerbated, I'd guess, by the sense of comparison by people nearby (which also helps explain the "buy a flatscreen TV but not have health insurance" phenomenon), which is well-recorded in microeconomics, I believe.

This is why equality is a good thing. Not full equality of outcomes, not flat salary schedules, not full-blown Marxism, but some protections -- progressive income tax, unionization, etc. -- that keep inequality in check. It also keeps the whole damn thing from spinning out of control.

That seems to make a fair amount of sense to me and is a hypothesis worth evaluating. Although, as Yglesias notes, testing macroeconomic hypotheses is hard.

Why Rehberg Can't Balance the Budget

by: Matt Singer

Mon Jun 28, 2010 at 12:52:41 PM MST

But there's something very frustrating about engaging in politics with people who pay lip service to big challenges and even lie about history. Here's an AP writeup on Congressman Rehberg's budget solutions:

Rehberg, a Republican seeking his sixth term as Montana's lone representative, said slashing taxes on corporations, capital gains and payrolls while balancing the budget is the solution. He said those types of measures were used in 1961, 1981 and 2001.

Now, it is true that tax rates were cut in 1961, 1981, and 2001. JFK pushed to cut the top marginal rate, for example, to something like 33% higher than the current rate. JFK did this while continuing to run surpluses and pay down the debt.

But let's look at what happened in 1981 and 2001:

We cut taxes and...didn't balance the budget.

Look -- in the near term in particular, I have absolutely no problem running deficits. Hell, I think we should run deficits. But planning for the long-term by advocating for specific tax cuts and only vaguely referencing spending cuts is not a plan to balance the budget. It is really just a very limited plan to expedite a great transfer of wealth from poor to rich in this country.

But the question of how to balance the budget is one we can have a serious discussion about. I had one of those on Saturday. Sadly, it looks like our Congressman had the opposite kind of conversation - absolutely nothing but empty rhetoric and misleading information.

Fighting discrimination is a boon for economic development

by: Jay Stevens

Thu Jun 24, 2010 at 15:52:12 PM MST

Most business people aren't stupid. If a city dedicates itself to tormenting them, they don't care much about how smooth and glitzy the local "economic development" agency is.

Job-creators want to see things like low taxes, a friendly regulatory environment, and community respect.

Few seem to have noticed the irony here: Just a few weeks before the hand-wringing about poor economic development began, the Missoula city council (by a 10-2 vote) studiously eschewed wiser counsels and crammed through an intrusive new ordinance regulating how businesses relate to cross-dressers and similar odd balls. So if you set up a business in Missoula, now you can look forward to a whole new world of lawsuits and bureaucratic bossiness.

That action alone sent a nasty message to potential new employers that it may take years to counter.
And it comes on top of Missoula's relative high property taxes and its long record of making life miserable for new enterprises who want to locate in the area.

Wulfgar's been here already and rightfully notes that ol' Natelson linking two unrelated events and is following crazy Rand Paul's undefensible defense of discrimination.

What's truly sad is that Rob uses his absolutely specious argument that "oddballs" are being protected to carry over his conclusion to an argument he never supports; he holds that businesses do best in unregulated environments. His only foundation is a fallacy about "cross-dressers" and Butte's difficult business environment. That might actually be possible ... if, as Rob assumes, the health of a business' bottom line is all that really matters to the employed these employers hire.

Forgetting here for a moment that Natelson uses Butte as an example of the effects of Missoula's civic institutions - Missoula, somewhat awkwardly to the Perfesser's argument, actually has a pretty strong economy and is experiencing growth - his argument, as Wulfgar rests on the assumption that the employed and employers care only about the bottom line.

Maybe there's something about a community besides taxes that employers need? Like...say...quality employees? Educated in quality schools? Perhaps business owners like to take a walk on the river, or bike to work, or buy fresh croissants from a locally-owned bakery? Or maybe business owners like communities that stand up to anti-gay discrimination. Believe it or not, there are gay business owners, or business owners with gay friends, relatives, or children.

Or maybe business owners like to operate where a lot of people live. You know, the customer thing.

Because most business owners are people - like the two business owners on the Missoula city council that voted for the anti-discrimination ordinance - and simply want to live a good life.

But then I don't think Natelson is really talking about actual business owners. My guess is that he's thinking about big business. Corporations. GE and Boeing. Wal-Mart won't be moving its corporate headquarters to Missoula for the tax break. But...why would you want to tether your city's future to a gigantic corporation? Didn't work out so great for Flint or Pittsfield, Massachusetts, where I grew up.

Here's what you need to know about Missoula's "dysfunctional" economic development: all consultants agree that Missoula was poised for success because of its "skilled/educated workforce," its "adequate wastewater treatment capacity and sewer lines," its "outdoor amenities" and "cultural opportunities," "all of which define Missoula as a high-quality place to live and recreate." Which makes it poised for economic growth.

And part of what makes Missoula a "high-quality place to live and recreate" is its anti-discrimination ordinance.

Washington heeds Bullock in fight to save MT's small farms and ranches

by: Montana Cowgirl

Wed Jun 23, 2010 at 18:32:55 PM MST

The toothless anti-trust  regulations that Bullock is trying to reform have

"contributed to the exodus of about 150,000 cattle operations since the mid-1990s, which has, consequently, caused the hollowing out of rural communities all across America."

The proposed reforms would improve market transparency and further define practices that are unfair, discriminatory or deceptive, including efforts by big packers that would limit the legal rights of small producers.

The draft rules have been praised by industry experts across the U.S.:

John Crabtree of the Center for Rural Affairs said that the rule isn't perfect, "but it is the most aggressive, significant livestock market reform to come out of Washington, perhaps since the passage of the Packers and Stockyards Act itself.

"This rule will breathe some life, some competition back into our livestock markets," he said. "And we're going to work hard to keep improving it, and we're going to fight -- tooth and nail -- to ensure that the packers cannot weaken the rule."

Congressman Deficit Redink Freaking Out About Projected 2013 Shortfall

by: Matt Singer

Fri Apr 23, 2010 at 16:02:08 PM MST

The health reform bill that I voted against included $5 billion for a temporary high risk pool for people with preexisting conditions.  That money was supposed to last through the 2014.  But this money is expected to run out by 2012.

Meanwhile, an attempt to verify Congressman Rehberg's claims results in one story...in the Clark Fork Chronicle...with a byline from...Jed Link, Rehberg's communications staffer.

Hmmmmmmm.....

Regardless, I don't think any of us are eager about there being a shortfall in those funds, but it does seem like it would be hard to know if the shortfall will happen before it is clear how many states are going to use them. And I'm not sure that we'd be better off eliminating high risk pools.

But forget about that. I'm just curious what Rehberg has done in the past ten years about the deficit other than basically create it by voting for tax cuts for rich people (or, as Rehberg calls them, his peers), two wars, or an unfunded prescription drug benefit.

Paul Krugman and the non-negligible probability of utter disaster

by: Jay Stevens

Mon Apr 12, 2010 at 09:37:07 AM MST

Read it. It's one of the better single-piece story laying out the case for government action on climate change I've seen.

And here's a quote that's especially relevant to Montana:

That said, some specific rules may be required. James Hansen, the renowned climate scientist who deserves much of the credit for making global warming an issue in the first place, has argued forcefully that most of the climate-change problem comes down to just one thing, burning coal, and that whatever else we do, we have to shut down coal burning over the next couple decades.

More below the fold...

Mayor Engen's Impressive Economic Team

by: Matt Singer

Mon Mar 08, 2010 at 12:03:11 PM MST

So this is good news:

But Engen more than made up for that a few weeks later when he provided a detailed outline of the [economic development] project's mission and methods, and made it clear that he is prepared to continue cracking the whip in order to get results right away.

St. Patrick Hospital president Jeff Fee, University of Montana executive vice president Jim Foley; Williamsworks founder and president Whitney Williams, NorthWestern Energy president Bob Rowe, First Security Bank president Scott Burke, Washington Cos. president Larry Simkins and Missoula Redevelopment Agency director Ellen Buchanan

My only complaint? The focus seems to be, as it is so often, on recruiting business. There are huge gains still to be made in Montana by developing homegrown businesses. Le Petit's expansion can be big local news. Big Sky's expansion has brought lots of jobs to town. Kettlehouse's growth is having a similar effect. There are interesting tech companies already based in town. Helping these folks grow is likely a surer bet for stable economic expansion than poaching industries from elsewhere.

It's not that poaching business is a terrible idea. I just think it shouldn't be job one.

Rehberg Decries Stimulus as "Failed" While Touring Jobs Project Funded with Stimulus Dollars

by: Matt Singer

Thu Feb 18, 2010 at 10:48:49 AM MST

Number one suggestion..stop spending money on failed stimulus. Tax relief!!

Beyond that, the spending in the stimulus didn't fail, unless our Congressman is advocating for cutting short COBRA subsidies or unemployment insurance. Hilariously, Congressman Rehberg tweeted this yesterday, around the same time he was touring the stimulus-funded Northern Hotel renovations:

When the two reached Nelson's basement office, Rehberg's work began. The congressman inquired about what the government could do for the Northern, promising to have a staffer look for grant options and Department of Energy assistance.

A year ago, by cooperating with the city of Billings, the Northern was able to sell $20 million in tax-free "stimulus bonds" to pay for the hotel's remodeling. Investors like the government-backed, tax-free bonds, which were made possible through the American Recovery and Reinvestment Act of 2009.

Even worse, our Congressman is apparently aware that he's full of it:

In an interview with The Billings Gazette editorial board Tuesday, Rehberg, who opposed the ARRA and is advocating a shift toward tax cuts, said the construction projects funded by the ARRA had merit....

And keep in mind when Rehberg rails about government spending that his office repeatedly calls for higher spending on numerous programs. This guy is absolutely all over the map.