Meet Nick Hanauer

Feb 12th, 2012

Meet Nick Hanauer. Self-made multi-millionaire, venture capitalist and member of the so-called 1%, he recently spoke with Yahoo! Finance commentator Henry Blodget and more than a few folks are sitting up to take notice:

"We are systematically destroying our customer base in this country by undercutting the middle class... If it was true that the rich and business were job creators, we'd be drowning in jobs today."

About Those Jobs Numbers

Sept 2nd, 2011

Well, the August jobs numbers are out and they are bad. In fact, the employment figures for the last month are net zero. In the midst of those clamoring to score points on today's report, Matt Yglesias makes this observation:

"Looks like we had 17,000 thousand new private sector jobs in August, which were 100 percent offset by 17,000 lost jobs in the public sector.

The striking zero result should galvanize minds, but it’s worth noting that this has been the trend all year. The public sector has been steadily shrinking. According to the conservative theory of the economy, when the public sector shrinks that should super-charge the private sector. What’s happened in the real world has been that public sector shrinkage has simply been paired with anemic private sector growth. This is what I’ve called “The Conservative Recovery.” Conservatives complain about the results because the President is a Democrat named Barack Obama. But the policy result is what conservatives say they want. Steady cuts to the government sector, offset somewhat by private sector growth. The reality is that this dynamic sucks, and we ought to be forcefully trying to avoid public sector layoffs knowing that workers are also customers for the private sector. But we’re not.

Hopefully Ben Bernanke and co will ponder this as they head into their September meeting."

Once more, leaders from both parties are ignoring the fact that the government is contributing to the collapse in demand.

Repulslican Economics

Aug 22nd, 2011

Proving, for the umpteenth time, that contemporary elected Republicans simply don't understand the college freshman concept of aggregate demand comes this little excerpt from the HuffPo today:

"...many of the same Republicans who are fiercely protective of tax cuts for the wealthy have already said they oppose Obama's plan to extend the payroll tax cut for low income Americans.

"It's always a net positive to let taxpayers keep more of what they earn," Rep. Jeb Hensarling (R-Texas) told the AP, "but not all tax relief is created equal for the purposes of helping to get the economy moving again."

Amazing. I am compelled to give a lesson. For all the "rich" people and their mouthpieces that call the President a "socialist" but fail to grasp even the most childlike fundamentals of consumer society (psst, that's called Capitalism, by the way), here's a primer:

The Problem Is STILL Demand

July 29th, 2011

The abysmal GDP numbers for the the first half of this year are out. One more time, here's why. From the AP:

"High gas prices and scant income gains have forced Americans to pull back sharply on spending. Consumer spending only increased 0.1 percent in the April-June quarter, the smallest gain in two years. Government spending fell for the third straight quarter."

We need solutions that address demand. Of course, the reductions in government spending are placing a terrible drag on this. In the current cup of tea, however, there is no room for more. But make no mistake, pulling hundreds of millions of dollars out of a fragile recovery is something which only makes sense to the senseless.

What might we do? We could extend the payroll tax holiday to everyone on the first $20 thousand in earnings, for a start. Or, as every economist with a clear view of our continued motion towards a full depression is arguing, we could bring back something like the WPA.

But we won't. There will be no solution to any of our economy's difficulties while the modern GOP holds the House and more than 40 seats in the Senate.

Period.