Posted at Economists for Dean.

There is growing evidence that the Bush campaign is finding it difficult to come up with an agenda for reelection.

First, by creating permanent deficits as far as the eye can see, it is difficult for them to now advocate any new spending or tax cuts. But, you say, "being irresponsible hasn't stopped them in the past, why not now?"  Well this time they are up for re-election and the chorus of "shrill" voices calling for fiscal sanity is growing rapidly and now includes such mainstream voices like The Financial Times, The Economist, the Wall Street Journal's Alan Murray, not to mention right wing groups like the CATO Institute and the Heritage Foundation.  Even Bush's top economist, Greg Mankiw acknowledged the difficulty in a recent New York Times article.

Posted earlier today at Economists for Dean

David Brooks in his op ed piece in the New York Times on Tuesday argues that compared to Europe, America has greater vitality due to its immigration policy.  He then goes on to argue that many indicators have really improved in America in recent decades and that in the spirit of Thanksgiving, we ought to give thanks for that.

Rather than stick to this simple point in a nonpartisan way he insists on making points that are thinly disguised ways of rewriting history to blur all distinctions between the parties as if to wave away the fundamental differences in how the parties have viewed social policy.

Posted today at Economists for Dean

A recent analysis on the economy I read somewhere made the point that some macro indicators are more characteristic of an economy in the late stages of an expansion rather than one entering a recovery.  One area of concern expressed by some commentators is consumer debt.  Angry Bear presents this chart .

Posted at Economists for Dean

This week's New Yorker has an account of what went wrong in the post-war occupation of Iraq that is painful, but important to read. It doesn't break a lot of new ground in terms of the broad themes (e.g. ideological wishful thinking dominated pragmatic thinking), but the depth and the human dimension of the reporting is the best I've read. Unfortunately it looks like the New Yorker doesn't provide the article online.

One thing that made an impression on me, that hasn't been discussed much, is the extent to which there was just pure ineptitude due to government bureaucracy in the military.

Here's an excerpt (hand typed):

Posted at Economists for Dean:

A problem facing Dean and the Democrats is how to explain the importance of the reckless fiscal policy pursued by the Bush Administration and the growing debt crisis --especially as the economy improves.  As Robert Rubin explains in his book, "In an Uncertain World" excerpted by Newsweek:

Robert Reischauer, a former head of the CBO and one of the wisest budget experts I know, thinks that our nation's leaders may well be unwilling to repair our long-term fiscal mess until we reach an inevitable day of reckoning. When that crisis arrives, we will either make the decision to increase revenues substantially--at what may well be an inopportune time--or face severe and prolonged economic tribulations. Then the American people will look back with dismay at what happened. Unfortunately, no one who is now concerned about deficits has yet found a way to explain these future costs in a way that has political resonance while these problems are being created and can still be prevented. Leaving aside debates about whether deficits matter and about whether the supply-side effects are real, tax cuts and spending increases often seem attractive in the short term to politicians--and voters--who either don't focus on the long term or perhaps recognize the potential problems but feel that they will fall on somebody else's watch.

 

As we all know political catchphrases, for better or worse, work.  See this article by George Lakoff on how the Republicans have succesfully framed issues:

On the day that George W. Bush took office, the words "tax relief" started appearing in White House communiqués. Think for a minute about the word relief. In order for there to be relief, there has to be a blameless, afflicted person with whom we identify and whose affliction has been imposed by some external cause. Relief is the taking away of the pain or harm, thanks to some reliever.  

Any ideas on how to "frame" the problem of the growing debt?  People have argued, for example, that the debt problem is like handing your grandkids your credit card bill.  How do we get that concept across in a simple concise phrase like tax relief?

Lerxst

Posted today at Economists for Dean

Today's employment report shows that over 250,000 net new jobs were added over the last two months (September's number was revised up to 125,000).  This is the first real solid piece of good news on jobs in quite a while.  It confirms that the sharp rise in GDP growth in the 3rd quarter was also reflected in job market gains.  While it is just a few months of data few economic forcasters doubt that employment will continue to rise through 2004.

This piece of good news for America's workers, however, does not mean that the economy should not be a major issue for Democrats in the 2004 election.   This expansion still makes the 1992 "jobless" recovery look like a jobs boom and many American workers are still taking a beating (see below).  Bush's economic policy has contributed little to the short-term economic revival (compared to what could have been done) but comes at the considerable expense of threatening our long-term economic health.  As Fed Chairman Greenspan said yesterday :

Remember that in just five years the first cohort of the baby-boom generation will reach 62, the earliest age at which social security retirement benefits may be claimed and the age at which about half of the prospective beneficiaries choose to retire. In about 2008, the proportion of the working-age population that will retire is projected to begin escalating. Almost surely, the social security and Medicare benefits that are promised under current law to future retirees cannot be financed with existing tax rates. Budget simulations by a broad range of analysts (including those at the Office of Management and Budget and the Congressional Budget Office) suggest that the rapid increase in the unified budget deficits that would occur under current law as the baby-boom generation retires could set in motion an unsustainable dynamic in which large deficits result in growing interest payments that augment deficits in future years. Such a development could have notable, destabilizing effects on the economy.

As we have argued in the past, the tax cuts were reckless, largely innefective and amounted to pilfering.  None of that is changed by this uptick in job growth.  Getting the message through about the recklessness and fraud of Bush's economic policies, however, will be made more difficult because of the media's focus on  day to day numbers as opposed to the wisdom of policy, which requires more effort.  As I said last week, "Dean and the other candidates must be prepared for the possibility that job growth will accelerate sharply in 2004 and how to handle the political rhetoric over an improving economy".

Posted today at Economists for Dean

Yesterday's Wall Street Journal's Money And Investing section read like a report devoted almost exclusively to scandal in corporate America.  It "Harken"s back to last Summer's stories of scandal at Enron, World Com etc.

Here are some of the stories:

Posted today at Economists for Dean...

As if we hadn't learned anything from the disastrous results of massive privatization in Russia before having the appropriate public institutions in place (see here for example), the U.S. appears to be going down the same road in Iraq.