Recent posts of particular interest to me:
- Stopping International Tax Avoidance: What Are the Best Alternatives?
- Bob Kuttner’s “Debtors’ Prison”
- Kuttner Responds!
- Sequester Watch, #5
- Apple on the Hill: What Can be Learned from Yesterday’s Hearing
- SNAP Rolls: They’re Elevated for a Reason
- Immigration Reform: Stand Down, IT Lobbyists!
The original working title for this post was, “Pardon me, have you seen my balls? I can’t seem to find them anywhere.” Too long though so I shortened it up. (I am of course referring to my fellow Democrats in DC. More on why I’m hanging this “sequestration fail” on them below.)
The subject matter is air traffic controllers. More specifically, the House and Senate voting to end sequester-imposed furloughs of air traffic controllers. Nobody likes flight delays. Nobody likes the thought of compromising air travel safety. It’s good that they’re back to work. It’s selective fixes to sequestration that should give us pause. Jared Bernstein sized the situation up last Friday:
You choose: is [the bipartisan vote to end sequester-imposed furloughs] support to mitigate one of the noxious effects of sequestration, which I and others have been tracking? Or is it papering over the high-visibility stuff that affects the affluent while lots of other budget bleeding goes on beneath the radar?
I choose the latter. While the annoyance of flight delays caught the attention of elected officials, businesspeople and other frequent flyers, lots of other, less advantaged Americans will continue to feel the pain of the sequester due to cuts in a variety of programs.
Exactly. There’s more than a little “So long as I get mine the rest of you can go to hell.” element to this. Charlie Pierce:
Bruce Bartlett with a good post at Economix about the path to the sequester, The Worst Possible Way to Cut Spending. The gist of it is, “If you stop to think about it for a minute, why is anyone surprised things turned out as they did?”
Now that we are counting up the days of the sequester instead of counting down, it would be a good time to cast blame. And my candidate is President Obama.
I’m not blaming Obama for the reasons that Bob Woodward came up with in his fantasyland. I am blaming President Obama and his administration for trying to be cute and clever rather than telling the public the truth about the economic crisis. The result is that the vast majority of the public, and virtually all of the reporters and pundits who deal with budget issues, does not have any clue about where the deficit came from and why it is a virtue rather than a problem.
The basic story is incredibly simple. Demand from the private sector collapsed when the housing bubble burst. We lost $600 billion in annual demand due to residential construction falling through the floor. We will not return to normal levels of construction until the vacancy rates return to normal levels. Vacancy rates are still near post-bubble record highs.
From Ezra Klein’s This is why Obama can’t make a deal with Republicans:
My column this weekend is about the almost comically poor lines of communication between the White House and the Hill. The opening anecdote was drawn from a background briefing I attended with a respected Republican legislator who thought it would be a gamechanger for President Obama to say he’d be open to chained CPI — a policy that cuts Social Security benefits — as part of a budget deal.
The only problem? Obama has said he’s open to chained CPI as part of a budget deal. And this isn’t one of those times where the admission was in private, and we’re going off of news reports. It’s right there on his Web site. It’s literally in bold type. But key GOP legislators have no idea Obama’s made that concession.
There you have it. Obama offers the opposition one of their must haves – and does it in plain sight for all to see – and they’re not even aware of it. Willful ignorance is only part of the problem however. Continue reading
Dylan Matthews at Wonkblog provides a link to the Office of Management and Budget’s account-by-account cuts resulting from sequestration.
(Matt Taibbi notes that Citigroup took more in bailout money from the Fed in January 2009, >$100B, than the entire $85B in sequestration cuts. That’s not to say that sequestration amounts are minor but that the Fed shelled out an insane amount of bailout money to big banks.)
If you’re interested in how sequestration is likely to play out watch Jared Bernstein’s interview with Richard Kogan. Here’s Jared’s intro:
When I want to understand the details of how the automatic cuts known as sequestration are likely to play out, I think “Richard Kogan.” And I’m lucky enough to be able to walk down the hall and cajole him into sharing his deep, institutional knowledge with us.
As a defense contractor I have some insight into how sequestration is likely to affect our business. (I talk regularly with program managers and business development people at work.) Kogan’s comments are entirely consistent with my experience.
From the NY Times, Austerity Kills Government Jobs as Cuts to Budgets Loom:
The chart is a bit difficult to read here. Click through to the article for a better view. The bottom line: Contrary to what you may be hearing in the popular press and around the watercooler, government
spending investment and consumption* has contracted over the past several years – almost 5% over the past two years. That contraction is one of the reasons for the anemic economic recovery since The Great Recession kicked in. Doubling down on those cuts will only exacerbate the problem. From the article (emphasis added):