Meanwhile, Back In The Real World

In the Beltway, they have the luxury of playing stupid Debt Ceiling Kabuki. But, via Atrios, in the real world, things are bleak, and they will get bleaker:

In Arizona, where there are 10 job seekers for every opening, 45,000 people could lose benefits by the end of the year, according to estimates from the state Department of Economic Security. Yet employers in the state have added just 4,000 jobs over the last 12 months.

Some other states will also feel a disproportionate loss of income unless hiring revives. In Florida, where nearly 476,000 people are collecting unemployment benefits, employers have added only 11,200 jobs in the last year. In Michigan, employers have added about 40,000 jobs since May 2010, but about 267,000 people are claiming jobless benefits.

[More. . .]

For many of the nearly 7.5 million people collecting unemployment benefits, those payments are keeping them afloat. Laura Metz, 42, was laid off from a clerical job paying $15.30 an hour at a home health care provider near her home in Commerce, Mich., nearly 15 months ago. She has been collecting $362 a week in unemployment insurance and about $50 a month in food stamps. That covers the basics. But Ms. Metz stopped making her mortgage payments last year on the modest home she shares with her 19-year-old son. A program that allowed her to make a lower monthly payment has expired, and she is waiting to see if the lender will modify her loan. She can no longer make her student loan payments for her bachelor’s degree or master’s in business administration [. . .]

After the Debt Ceiling Kabuki ends, this will still be the reality, indeed almost certainly worse. For as Paul Krugman writes, "No We Can't" is the new motto of the Beltway:

[A] destructive passivity has overtaken our discourse. Turn on your TV and you’ll see some self-satisfied pundit declaring that nothing much can be done about the economy’s short-run problems (reminder: this “short run” is now in its fourth year), that we should focus on the long run instead.

This gets things exactly wrong. The truth is that creating jobs in a depressed economy is something government could and should be doing. Yes, there are huge political obstacles to action — notably, the fact that the House is controlled by a party that benefits from the economy’s weakness. But political gridlock should not be conflated with economic reality.

Our failure to create jobs is a choice, not a necessity — a choice rationalized by an ever-shifting set of excuses.

Of course the Obama Administration is not the only, or the main, culprit, here. But it is a culprit. On economic policy, the Obama Administration has failed the Nation and it has failed Democratic values.

Maybe there is nothing more they can do now and maybe it is important that they play their cards this way to avert something worse after 2012. But what happened in 2009 and 2010? Why was the first stimulus so inadequate? Why was there not more stimulus through reconciliation in the budget? And why did the Treasury Department do HAMP instead of helping homeowners?

Yes, in the end, the buck stops with the President, but the President's top economic advisor, Treasury Secretary Tim Geithner, has been a disgraceful failure.

The sooner he leaves, the better.

Speaking for me only

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    More on the job front (5.00 / 3) (#1)
    by MO Blue on Mon Jul 11, 2011 at 08:17:12 AM EST
    Veterans face high unemployment after military service

    The jobless rate for veterans who served at any time since September 2001 -- called Gulf War-era II veterans -- was 13.3% in June, up from 12.1% the month before, according to the Bureau of Labor Statistics. In June 2010 it was 11.5%.

    I'm sure that Obama's job creation programs will have that rate down to 7% by next year. {snark x 10}

    BTW, I recommend that everyone read the entire Krugman post. It is time well spent.

    A neighboring article on the op-ed page (none / 0) (#34)
    by KeysDan on Mon Jul 11, 2011 at 10:38:51 AM EST
     that you should read is entitled: "The Method to Their Madness", by Ross Douthat. Why do that, you ask?  Well, to learn what wingers are telling Boehner  to think, and do.

    So as not to get mixed up in your read, the "madness" of the article refers to the Republicans. Most of the points are those we are well aware of, such as that Obama wants a "right-leaning" deficit deal; that the WH made no effort to tie a debt ceiling vote to the extension of the Bush tax cuts; and that the no-secret secret is that  the WH has given ground on purpose. All because such a deal will be better for the president's re-election.

    However, Douthat's worry (meaning the Republican's worry) is that Obama is making concessions as a deficit cutter campaign prop (that is what we call cutting social programs these days) but with the knowledge that the Bush tax cuts will expire at the end of 2012 and, if reelected. Obama may let some or all expire.  A president Romney would never do that, but the election may not turn out well for Romney.  So, Republicans should go for the biggest deal they can get now.

    Douthat and his masters can, I believe, relax.  President Obama will not let the Bush tax cuts expire; more likely, the deficit deal will include a pledge for permanence of the Bush tax cuts. After all, Obama will have the cuts from social security, medicaid and medicare to pay for them. Oh, maybe I got that mixed up, the madness belongs elsewhere.


    No one talks about (none / 0) (#40)
    by suzieg on Mon Jul 11, 2011 at 05:07:14 PM EST
    They are indifferent to the middle class. (5.00 / 5) (#5)
    by masslib on Mon Jul 11, 2011 at 08:29:16 AM EST
    The rich have had their recovery.  The middle class has been decimated and when you think about the current debate all I see is vultures picking on the carcass.  I don't understand the Democratic Party anymore.  

    This "Chris in Paris" comment sums it up (5.00 / 5) (#6)
    by MO Blue on Mon Jul 11, 2011 at 08:33:47 AM EST
    Good luck rebounding if there's no middle class. This isn't a new problem but Washington keeps pretending as though it isn't even a problem. The decades long decline is ignored by both parties in favor of making life easier and more comfortable for the financial elite. link

    That's it exactly. (5.00 / 2) (#9)
    by masslib on Mon Jul 11, 2011 at 08:58:04 AM EST
    When I read that Bill Clinton said we needed to curb entitlement spending or we wouldn't have any money left to invest in the future I had to laugh.  This is a rich country.  We have plenty to invest in the future if anyone in Washington were interested in that.  He went to Aspen to share his big idea of lowering corporate taxes.  Right, because nothing is more important now than lowering corporate taxes.  Unbelievable.  The entire Party elite seem to think the middle class simply won't notice they are being completely ignored.

    Being ignored might be better (5.00 / 2) (#11)
    by MO Blue on Mon Jul 11, 2011 at 09:02:37 AM EST
    than being robbed blind and forced into poverty to pay for wars, tax cuts for the uber-wealthy and the proposed cuts to corporate taxes.

    Actually, I should say it's worse than being (5.00 / 1) (#12)
    by masslib on Mon Jul 11, 2011 at 09:03:00 AM EST
    ignored.  The middle class is like the abused girlfriend.  It's our fault the recovery has stalled because we don't have the right skills for the job market, we are way too greedy about our entitlements, oh and our ass is fat.

    The first entitlement spending (5.00 / 2) (#17)
    by MO Blue on Mon Jul 11, 2011 at 09:09:12 AM EST
    we need to eliminate is the health care, pensions and other services that past presidents get. Then we need to eliminate the entitlement programs that uses tax payer funds for health care and pensions for members of Congress.  

    I second that motion (none / 0) (#41)
    by suzieg on Mon Jul 11, 2011 at 05:08:32 PM EST
    But, but, but . . . weren't we promised the (none / 0) (#42)
    by oculus on Mon Jul 11, 2011 at 05:20:58 PM EST
    same or equivalent health care coverage as Congresspersons receive?

    Krugman's Excuse No. 3 (5.00 / 3) (#7)
    by BTAL on Mon Jul 11, 2011 at 08:37:26 AM EST
    is a bit off the mark.  He "blames" pundits for making the falsehood.

    Unemployment soared during the financial crisis and its aftermath. So it seems bizarre to argue that the real problem lies with the workers -- that the millions of Americans who were working four years ago but aren't working now somehow lack the skills the economy needs.

    Yet that's what you hear from many pundits these days: high unemployment is "structural," they say, and requires long-term solutions (which means, in practice, doing nothing).

    Since when did the POTUS become a pundit?

    Yes, I noticed that and (none / 0) (#30)
    by KeysDan on Mon Jul 11, 2011 at 10:06:54 AM EST
    wondered if Dr. Krugman was being snarky or just employing indirect criticism or avoidance of same.  "pundit" could be interchanged with president throughout the article.

    Is it really "passive" when the pundit (5.00 / 3) (#8)
    by Anne on Mon Jul 11, 2011 at 08:55:11 AM EST
    class, reporters, so-called experts and the Very Serious People continue to read directly from the notes they've been handed by the administration and political leaders that misinform the people about the debt and the deficit?  Because that's what usually precedes the solemn pronouncements that there really isn't anything much we can do - which is also not true.  

    And so, the urban legend grows.

    The media continue to feed that, and the politicians are using the resulting chatter among ordinary people to bolster their rationale for why we HAVE TO slash spending.  It's a vicious cycle that's serving an agenda that is not geared toward improving the quality of ordinary people's lives - something that, if brought to fruition, is going to smack a lot of people in the back of the head with a financial 2 x 4; that cycle is going to create a dangerous vortex into which a lot of people are going to be lost, and real recovery is going to be some small spot on the horizon that gets smaller and smaller if these  regressive policies prevail.  

    And as jobs continue to be shed, and demand sinks further, I expect a lot of serious-faced reporting that will be accompanied by shoulder-shrugging and pathetic recitation of the "we did the best we could" excuse we have heard over and over and over.

    The real problem here, the corner into which Obama, in particular, and with help from other Democrats, has painted himself - by choice - is that it is close to impossible to pivot away from the policies of austerity with even a shred of credibility intact.  You don't pound the austerity drum for months and months, with economists all over the place screaming that the last thing we need are policies that will further contract the economy, after offering - even demanding - that spending cuts be even larger than before, and suddenly announce that (1) you've had a change of heart, (2) it turns out that worse than having a deficit problem is having a jobs problem that you've realized isn't going to be solved this way, and (3) you don't want to be the first president to use the debt ceiling as an ideological tool because - news flash! - it will be forever thus going forward.

    So, what are we left with?  Nothing good that I can see, unless we get to the brink of August 2, and everyone blinks and a clean bill is passed that raises the debt ceiling without concessions of any kind.

    Lol...as if.

    I don't think the pundit class (none / 0) (#10)
    by masslib on Mon Jul 11, 2011 at 09:00:37 AM EST
    are simply glorified stenographers.  They are not the middle class.  They are true believers and they don't want their taxes going up.

    absolutely (none / 0) (#16)
    by observed on Mon Jul 11, 2011 at 09:08:08 AM EST
    Ali Velshi comes  across as a slavering wannabe oligarch to me. dumb as  a post, too

    I've said this before (5.00 / 1) (#21)
    by Militarytracy on Mon Jul 11, 2011 at 09:22:30 AM EST
    But I can't help saying it again since you brought up his name.  I'm not any sort of serious investor.  I am fascinated by what is called "economics" but from the perspective of small business owner.  Many in my family have the entrepreneur gene, when demand is down that usually affects a small businesses ability to survive.

    My husband and I want to have a small business when he retires so I read probably Too Much about economic STUFF.  I don't want us to throw our nest egg in at the worst time ever though.  In my readings this past 12 mos at least, what has been going on with gold has been fairly big news.  And when Ali Velshi took a quiz on the air and was asked where the world's second largest gold reserve was and he answered China, I couldn't believe it.  He is supposed to be some sort of business and investing authority and he is on the tube every day blathering about what everybody should be doing and he has not ONE clue about what country has the second largest gold reserve?  And I'm some soldiers wife and some disabled kids mom and I do know because it is pertinent information if you are paying attention and have the time to pay attention to what is going on within global economies?


    What's the answer, btw? (none / 0) (#36)
    by observed on Mon Jul 11, 2011 at 01:50:34 PM EST
    Surprisingly...Germany (none / 0) (#38)
    by Militarytracy on Mon Jul 11, 2011 at 02:27:38 PM EST
    True - and neither do their corporate (none / 0) (#18)
    by Anne on Mon Jul 11, 2011 at 09:10:39 AM EST
    employers; staying on script is important for many reasons, none of which have much to do with informing or educating the public.

    Obama is due to give a presser at 11:00 am, in advance of more talks on the debt ceiling; I think it will be instructive to see what he says and how he frames the issues - and if anyone in attendance makes any attempt to call him on this utter BS.


    In order to save our financial (5.00 / 2) (#14)
    by Militarytracy on Mon Jul 11, 2011 at 09:05:21 AM EST
    infrastructure as close to the status quo as they could get, the plan for the banks to "earn their way" out of this was chosen.  In order for them to do that though you had allow them to continue to rape and pillage a bit longer which weakened consumers and the little people even more.  They couldn't allow mortgage principal to be written large scale either because then the mortgage backed securities would fail and that would also destroy the status quo of the existing shadow banking and investment banking.

    And the banks haven't earned their way out either.  After they got new regulation passed to allow the keeping of two sets of books, they remain insolvent as hell.  Paulson, Geithner, Summers, and just about the whole lot of Wall Streeters could not and still refuse to come to terms with the fact that they spent a large part of their careers creating financing and investing cancer that is destroying our economy now.  And everytime they do something to prevent the invisible hand from restoring economic balance and consequences for really bad investment decisions the cancer gets bigger and bigger.

    Trying to convince the little people that nothing can be done is very important though to the survival of that imperial 1% and their parachutes of gold.  If a majority of us called bullshit and demanded the return of banking regulations where the money coming out of the Fed could only be turned into a true profit if you loaned it to someone who was a decent risk and paid you back in the end with some interest, and all this insane investment banking algorithmic scheming became illegal to do with tax payer money in any form, everything would change.  But all the banks are in one big casino now, like frothing at the mouth gambling addicts, and they will not leave the tables until they have lost everything and nobody is staking them anymore. or if they all became able to fail.  None of this will come to pass though until they have destroyed us even more and brought us lower still, when the country has no where left to attempt to hide from what must be done then it will finally be done.  People and families and souls will be destroyed before we get there though.  I never thought I would live to see this.  They told me when I was a kid it was impossible for this to happen again, that they had fixed "the system" and made it impossible for all this to happen again, yet here we are and it is happening again.

    the more complex (5.00 / 2) (#20)
    by observed on Mon Jul 11, 2011 at 09:20:22 AM EST
    The financial instrument, the more chance a smart person can game the system

    Absolutely (none / 0) (#23)
    by Militarytracy on Mon Jul 11, 2011 at 09:25:17 AM EST
    And the more complex the instrument, the more likely that it is bullshit and crap.....the impossible dressed up and made to seem possible.

    and the people who (5.00 / 2) (#26)
    by observed on Mon Jul 11, 2011 at 09:34:39 AM EST
    Game the system  have a Gecko like belief they  are positive moral agents, because they improve efficiency.  In fact, my outsiders  take is  that stability is decreased.

    More on the economic front (5.00 / 1) (#27)
    by MO Blue on Mon Jul 11, 2011 at 09:52:59 AM EST
    Close to $2 of every $10 that went into Americans' wallets last year were payments like jobless benefits, food stamps, Social Security and disability, according to an analysis by Moody's Analytics. In states hit hard by the downturn, like Arizona, Florida, Michigan and Ohio, residents derived even more of their income from the government.

    By the end of this year, however, many of those dollars are going to disappear, with the expiration of extended benefits intended to help people cope with the lingering effects of the recession. Moody's Analytics estimates $37 billion will be drained from the nation's pocketbooks this year [...]

    "If we don't get more job growth and gains in wages and salaries, then consumers just aren't going to have the firepower to spend, and the economy is going to weaken," said Mark Zandi, chief economist of Moody's Analytics, a macroeconomic consulting firm. link

    Quick! (none / 0) (#28)
    by masslib on Mon Jul 11, 2011 at 09:58:03 AM EST
    Lower taxes and cut spending before things get really bad.

    Yes, Geithner (5.00 / 1) (#29)
    by cal1942 on Mon Jul 11, 2011 at 10:06:52 AM EST
    has been a failure.  Is anyone really surprised?  Hiring a central banker who who stood by with his finger in his a$$ while the crooks on the Street destroyed the economy was the act of a man who is either frightfully stupid or philosophically inappropriate.  Neither is good and simply getting rid of Geithner, although desirable, isn't going to change the shamefully poor judgement of the man at the top.  We have no idea what loser will replace Geithner.  We needed a President who knows bullsh!t when he hears it.

    Why anyone with even a grain of good sense would listen to a Tim Geithner who advises restraint when only spending will solve the problem is completely beyond me.  I have house pets with better judgement.

    But (5.00 / 1) (#31)
    by TeresaInSnow2 on Mon Jul 11, 2011 at 10:19:29 AM EST
    House pets have really, really good judgment, so that's an unfair comparison ;-).

    yeah, my pet mountain (none / 0) (#32)
    by observed on Mon Jul 11, 2011 at 10:26:29 AM EST
    Lion never liked Obama

    I don't think it's so much that Obama (5.00 / 7) (#33)
    by Anne on Mon Jul 11, 2011 at 10:28:56 AM EST
    doesn't have a finely-tuned BS detector, as it is that he comes to the table loaded with a dangerous combination of being in agreement with the Reagan/Norquist view of government's role, a condescending opinion about who does and does not "deserve" help, and the thing that always gets him - a strong desire to please those who are considered to be his political opponents.  

    What Geithner does is give Obama the kind of technical support, if you will, that props up what Obama already believes; it's a mutually beneficial arrangement: Geithner gets to feed Obama the policy that puts Wall Street and Corporate America over all else, and Obama gets to advance an agenda he believes in by trying to out-Republican the Republicans, which he hopes will gain him the affirmation he so desperately seeks from them.

    I'm sick of the psychodrama, that's for sure, but I don't see it ending anytime soon; if Geithner goes, Obama's certainly not going to replace him with someone whose views are any different.


    Exactly (5.00 / 1) (#35)
    by Militarytracy on Mon Jul 11, 2011 at 11:04:00 AM EST
    All the names beng floated as (none / 0) (#37)
    by MO Blue on Mon Jul 11, 2011 at 02:25:00 PM EST
    a possible  replacements for Geithner also were people who would show just how business friendly the Obama administration will be now and in the future.

    IIRC one of the names was Jamie Dimon, J.P. Morgan Chase CEO and new Wall St hero.


    Oh Gawd no! that creep (none / 0) (#44)
    by hairspray on Mon Jul 11, 2011 at 06:18:45 PM EST
    He gives robber barons a good name.

    More Atrios (5.00 / 1) (#39)
    by MO Blue on Mon Jul 11, 2011 at 02:45:23 PM EST
    So when we solve the deficit problem 4evah and unleash the confidence fairy, what will the excuse be then?

    old people hoarding their wealth. (none / 0) (#45)
    by observed on Tue Jul 12, 2011 at 09:57:09 AM EST
    Hoover economics (none / 0) (#2)
    by Abdul Abulbul Amir on Mon Jul 11, 2011 at 08:19:03 AM EST

    Not surprising in that Obama is determined to repeat Herbert Hoover's economic policies of increased spending coupled with increased marginal tax rates.


    I find it surprising. (none / 0) (#3)
    by inclusiveheart on Mon Jul 11, 2011 at 08:24:47 AM EST
    On the politics it is insanity.

    Megan McCardle Lives! (none / 0) (#4)
    by Big Tent Democrat on Mon Jul 11, 2011 at 08:28:52 AM EST
    Please cite John Taylor. At least he is a learned person.

    Why cite either one? (none / 0) (#24)
    by Abdul Abulbul Amir on Mon Jul 11, 2011 at 09:27:25 AM EST

    The increase in federal spending by Hoover, both in dollar terms and as a percent of GDP, as well as his increase in marginal tax rates are a matter of record.  So are the results.



    "Dem belly full... (none / 0) (#13)
    by kdog on Mon Jul 11, 2011 at 09:03:35 AM EST
    but we hungry.
    Hungry mob is an angry mob."

    Might take another 20 years, but the ruling class will rue the day they killed the middle class.  People rarely go quietly into poverty...eventually they look to eat the rich, and though we have too many there still aren't enough cops to protect them.

    It won't take 20 years kdog (none / 0) (#15)
    by Militarytracy on Mon Jul 11, 2011 at 09:06:23 AM EST
    I'd say two max of this crap before Americans start flipping the hell out.

    We're still a wee bit... (none / 0) (#22)
    by kdog on Mon Jul 11, 2011 at 09:24:24 AM EST
    fat, lazy, and occupied with our toys...broked*ck friends of mine are still getting credit card offers, so I'm thinking livin' on the cc will mask our troubles for another decade or two.  Within two years we plant the seeds, 10-20 before we grow the balls to fight back.

    Speaking of credit cards (none / 0) (#25)
    by Militarytracy on Mon Jul 11, 2011 at 09:34:11 AM EST
    About seven  or eight months ago the cards that we don't use sent me letters saying that they were cutting our available line of credit.  Fine with me, we don't use them anyhow...and even less now that things are so crazy.  I guess my consumer confidence has gone completely to hell too and we aren't an unemployed family.  Then two months later two of them sent me a letter saying they were increasing our credit line and the figures they were increasing it to made my jaw hit the floor.  I can buy an SUV on one card, and then fly to India and have a kidney transplant and maybe new boobs too.  The economy is so broken it looks like the credit card companies do not know what to do to make some damned money around this place.  They literally don't know whether to $hit or get off the pot.  Our mailbox is full of offers too, many offers to refinance our house and they are giving me figures in these offers.  Someone has been running our credit to make such offers.  I read them and I get so pissed off.  I thought that Clinton made it illegal for them to do that?  Looks like someone got some regs changed.  Nobody has the right to run my damned credit though without my permission!!!  But I guess they do.

    I hope it doesn't take two decades. (none / 0) (#43)
    by hairspray on Mon Jul 11, 2011 at 06:12:45 PM EST
    But where I live, everyone is on twiter with the ipods,i-phones, and Ipads with music and games 24/7.   I don't think they notice yet.  Living on credit has been too easy.

    so how is the (none / 0) (#19)
    by observed on Mon Jul 11, 2011 at 09:12:33 AM EST
    FOX news coverage of the UK phone hacking scandal? Up to their usual standards  im sure