Recommended Reading: 11/18/2010

The Wonk Monkey is excited today. He gets to go and sit down with Thing #2’s teacher and discuss how he is progressing. For some reason, the Wonk Monkey enjoys finding out how things are and coming up with a plan to make progress.

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Yes, Nancy Pelosi is the most unpopular politician in the country. Nate at FiveThirtyEight shows her favorability ratings compared with many of the other politicians working right now.

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Robert Reich makes an impassioned plea to extend the jobless benefits for the long term unemployed while at the same time not giving tax cuts to the Rich.

The long-term unemployed can’t get work because there are still five people needing work for every job opening. And the long-term jobless are often at the end of the job line: Either they don’t have the right skills or enough education, or have been out of work so long prospective employers are nervous about hiring them.

Moreover, the top 1 percent spends a small fraction of their income. That’s what it means to be rich — you already have most of what you want. So extending the Bush tax cut to them won’t stimulate the economy.

Yet people without jobs, and their families, are likely to spend every penny of unemployment benefits they receive. That will go back into the economy and save or create jobs.

A Labor Department report shows that for every $1 spent on unemployment insurance, $2 are spent in the economy. If you don’t believe the Labor Department, maybe you’ll believe Goldman Sachs analyst Alec Phillips, who estimates that if unemployment benefits are allowed to expire, the American economy would slow by a half a percent.

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For once a politician (President Obama) is governing exactly as he said he would.

Yet Obama is doing exactly what he said he would do. Perhaps the critics should read—or reread—the president’s own books. Dreams From My Father (1995) and The Audacity of Hope (2006) are the most substantial works written by anyone elected president since Woodrow Wilson (who wrote several books before he won election in 1912). In laying out his philosophy, Obama contrasts the GOP’s excessive individualism with the ideal of “ordered liberty” and the rich traditions of civic engagement typical of America in the 18th and 19th centuries. He also criticizes orthodox Democrats for too quickly dismissing market solutions and too often defending failed government programs. Above all, he criticizes the hyperpartisan atmosphere of contemporary public life.

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Suggested Reading 11/17/2010

The Wonk Monkey is a bit bleary eyed this morning, he was playing monkey games into the wee hours of the morning. Bad monkey.

Now… for something completely different.

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Nate Silver at FiveThirtyEight looks at how Democratic candidates fared in the last election cycle compared to their voting record.

This simple analysis would conclude, then, that Democrats were punished by voters for their bailout and health care votes, but not to any particularly important extent for cap-and-trade or the stimulus package.

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Although the Treasury Department is confident that the issues revealed due to problems with the foreclosure paperwork has been contained, not everyone is feeling comfortable with it, and they fear it will lead to a new round of problems in the housing market.

The fear is that uncertainty about the ownership of all mortgages could deal another blow to confidence in the housing market and cause home values to plunge again.

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Dem’s see no chance of cap-and-trade passing in the next congress.

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President Obama has reassured Democrats that he want’s the Bush’s middle class tax cuts to be made permanent but he is still against making the tax cuts for the upper 2% permanent.

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Politifact gives the following statement from Paul Krugman a False rating:

They simply assumed they were going to reduce the rate of health care cost growth. And they said, how are we going to do that? By monitoring and taking additional measures as necessary. So the report was completely empty on the only thing that really matters and then had a whole bunch of things which involved large tax cuts for the top bracket. What on earth is that doing in there?

Politifact says:

In ruling on Krugman's statement, he said the deficit proposal was "completely empty" on reining in the future growth of health care costs. Krugman has a point that the co-chairs' proposal is vague. But the proposal does have several specific ideas on how to strengthen the IPAB. It has other recommendations on health care spending as well, and it includes dollar estimates for how much its ideas would reduce spending. It does recognize that health care spending must be controlled, and it's not completely empty of ideas. We rate Krugman's statement False.

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It’s not surprising that the insurance companies didn’t like the health-care overhaul.

Health insurers last year gave theU.S. Chamber of Commerce $86.2 million that was used to oppose the health-care overhaul law, according to tax records and people familiar with the donation.

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A Republican filibuster could prevent the extension of unemployment benefits, and the Democrats are not happy about it.

"On the one hand they want to provide $700 billion in tax cuts to the wealthiest Americans but not pay for them. And on the other hand they're demanding that UI benefits for the middle class be paid for," Reed said.

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Everyone hates the deficit commission’s recommendations, partially because most people don’t understand how difficult of a situation is.

"I think the public doesn't understand the choices very well yet," Rivlin says, "and that's because in the election, there were a lot of people saying, 'It's really easy — just do this one simple thing.' Just cut the spending or just raise the taxes or just cut out waste, fraud and abuse. But if you sit down with the numbers and look at what the government actually does and how it pays for it, it's obvious that there is no simple solution."

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Interestingly, one of the reasons why we may have out-lived our Neanderthal kin is due to our slow growth.

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The GOP is swearing off pork for two years. I will see it and then I might believe it.

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Recommended Reading 11/16/2010

A second poll, this one by CNN, indicates that the last election was not an indication of approval for the Republican platform.

Asked whether the election provided a mandate for Republicans or was a rejection of Democrats, 70 percent said the midterms were a negative reaction to the governing party. Only 17 percent said the election provided the GOP with a mandate.

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Politico has a great article on how Healthcare Exchanges are working in the few states that already have them and what to expect. By law, the states are required to roll out their Healthcare Exchanges in 2013.

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To steal the headline, Congressional Freshmen vow not to party like it’s 1994.

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Politifact gives a huge Pants On Fire (their lowest rating) to George Allen’s statement: “The new Congress must repeal and cutoff any additional money borrowed and set aside for Obama, Reid and Pelosi's $1.2 trillion stimulus spending bill.”

Allen is not only exaggerating the spending total by President Obama and the Democratic leaders of Congress, he is doing it by including billions of dollars passed under a Republican president. That’s just not false, it’s ridiculous. So we have to set the meter ablaze. Pants on Fire.

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Politifact says it is True that: “If you look at our spending, it's the highest it's been as a share of our economy in 60 years, revenue is the lowest it's been as a share of our economy in 60 years, so we're going to have to work both sides of the equation.”

In 2009, tax receipts accounted for 14.8 percent of GDP. According to the table, tax receipts as a share of GDP were always higher all the way back through 1950, when they accounted for 14.4 percent of GDP. That would be 59 years -- not quite 60, but very, very close.

The recession factors into the tax revenue statistic as well. Both the 2008 stimulus package under President George W. Bush and the 2009 stimulus under President Barack Obama included tax breaks as a major component.

Because the statistics show a number so close to 60 years -- and because Conrad was speaking during a television interview rather than a prepared speech or written statement -- we'll give him some leeway and rate the statement True.

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Politifact finally give a True rating to the following statement: “We now consume at the federal level 25 percent of the gross domestic product. Historically we were at 20 percent. So we've taken 5 percent away from the private sector.”

In fact, the only other years since 1950 in which federal spending exceeded 23 percent of GDP came in 1982 and 1983, with 23.1 percent and 23.5 percent, respectively. That was during and immediately after the last recession that rivaled the current one in severity, the 1981-82 recession. Economic downturns tend to affect this statistic because they slow GDP and increase the demand for government services. Even without special stimulus measures, spending goes up for mandatory items such as food stamps.

So in 1983, under a Republican president, Ronald Reagan, the government spent just 1.2 percentage points less than the current level, which suggests that the recession shouldn't be ignored as a major reason why spending is so high.

Still, Paul's larger point is valid. Federal spending is now approximately 25 percent of GDP, and that level is roughly 5 percentage points higher than the historical pattern. So we rate his statement True.

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President Obama and some top Democrats are pushing for the passage of the Dream Act during the lame duck session of Congress.

The legislation would grant undocumented students who were brought into the United States as minors by their parents a path to citizenship through higher education or military service.

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For the first time since Vietnam, a living soldier has been awarded the Metal of Honor.

"You may believe that you don't deserve this honor, but it was your fellow soldiers who recommended you for it," Obama told Giunta at the White House Tuesday. "For your service, we're all in your debt, and I'm proud to be your commander in chief."

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Charlie Rangle is guilty of ethics violations and will be given censure and a letter of reprimand.

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The Merchant of Death if finally on US soil.

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John McCain is calling for the military to trim $100 billion from their budget.

Income Disparity in the United States

Recently on Facebook someone posted the following statement:

there is a basic flaw in the assumption that income disparity is a bad thing. Just because the gap is wider, that doesn't mean the poor are poorer. Yes, the rich are richer in this country, but so are the poor. There is no finite amount of wealth in the world, where if the rich have more, that means the poor have less. It doesn't work that way.

As a result of that statement the Wonk Monkey decided to look into income disparity in the United States in order to see how true this statement was. Fortunately the Census of 2009 has provided some fresh data.

USA Today Reported:

The income of American households fell only slightly last year despite the severe recession because of income gains among the elderly, the Census Bureau reported Thursday.

But the number of people in poverty reached its highest level in 51 years.

Median household income was $49,777 in 2009, down 0.7% from a year earlier, a change that was not statistically different from 2008, the agency said.

According to the article the income gains among the elderly was due to increased social security payments which altered the numbers. Without increased Social Security payments the median income numbers would have dropped even more.

In addition the article states:

The poverty rate rose to 14.3%, up from 13.2% in 2008.

A total of 43.6 million people lived in poverty last year, up from 39.8 million in 2008 — the third consecutive annual increase. Extended unemployment benefits lifted 3.3 million people out of poverty, compared with 900,000 in 2008.

So this article only dealt with the poverty rate. In short, the people in the median dropped a little and more more people fell into poverty.

Now for the income disparity:

The income gap between the richest and poorest Americans grew last year to its widest amount on record as young adults and children in particular struggled to stay afloat in the recession.

The top-earning 20% of Americans — those making more than $100,000 each year — received 49.4% of all income generated in the U.S., compared with the 3.4% earned by those below the poverty line, according to newly released Census figures. That ratio of 14.5-to-1 was an increase from 13.6 in 2008 and nearly double a low of 7.69 in 1968

A different measure, the international Gini index, found U.S. income inequality at its highest level since the Census Bureau began tracking household income in 1967. The U.S. also has the greatest disparity among Western industrialized nations.

Some other findings were:

The poorest poor are at record highs. The share of Americans below half the poverty line — $10,977 for a family of four — rose from 5.7% in 2008 to 6.3%. It was the highest level since the government began tracking that group in 1975.

The 2009 poverty level was set at $21,954 for a family of four, based on an official government calculation that includes only cash income. It excludes non-cash aid such as food stamps.

So lets go back to the core of the original statement:

Yes, the rich are richer in this country, but so are the poor.

This statement does appear to be partially true based upon the latest census numbers. The rich are richer. But considering that the median income fell and there are more people listed in extreme poverty it would appear the second part of the statement is false. The poor are not richer, only poorer.

 

Technorati Tags: Income Disparity,Poor,Median Income,Poverty Level

Recommended News: 11/15/2010

NPR looks into cranberries and their medicinal effects.

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The number of people unemployed for six months or longer are at levels is at levels not seen since the Great Depression.

Over 40 percent of the unemployed — more than 6 million Americans — have been out of work for than six months or longer, according to the Bureau of Labor Statistics.

"Once people become unemployed for long periods of time, you start seeing a serious depreciation or reduction in their skill levels — in the human capital that they carry."

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Filibusters are holding up many important posts in our government and the situation is reaching critical levels.

One of them is Jim Cole. The White House nominated him almost six months ago to be the Justice Department's deputy attorney general, kind of like the chief operating officer for the entire department.

"The deputy attorney general job is the person who actually runs the Justice Department day to day," said Jeffress, who has written to urge the Senate to confirm Cole, "the person who is the decision-maker on many, many criminal cases, the person who is the decision-maker on many, many personnel issues. And it's extremely important to have somebody who not only has law enforcement experience but who is a good manager."

Shortly after Cole's nomination in May, Alabama Republican Sen. Jeff Sessions criticized him for his work in private legal practice, monitoring the fallen insurance giant AIG, and for his approach to national security.

"He's written an op-ed, for example, that suggests that he believes the 9/11 attacks were criminal acts, not acts of war," Sessions told NPR at the time.

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Nordstrom Rack is opening an online store.

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Charlie Rangles ethics hearing has started and a top ethics lawyer testified that there is no evidence of corruption.

"It's hard to answer the question of personal financial benefit," Chisam added. " I think the short answer is probably no. Do I believe that based on the record that Congressman Rangel took steps to benefit himself based on his position in Congress? No. I believe that the congressman, quite frankly, was overzealous in many of the things he did. And sloppy in his personal finances."

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Rangle walked out of his ethics hearing, which will speed things up considerable.

With Rangel gone – foregoing the 10 hours he was granted to defend himself - the committee moved very quickly through the case and spent just 80 minutes reviewing the allegations before retiring to decide whether it would approve a "motion for summary judgment."

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Blue Dog Democrats are trying to strip away some of Nancy Pelosi’s power.

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Politifact has provided a fact sheet on reducing the national debt.

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Politifact rates the following statement as False: Social Security is a Ponzi Scheme.

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Thinks are looking decidedly bad for Charlie Rangle.

In an ominous sign for Representative Charles B. Rangel, the House ethics committee on Monday said the facts presented by a prosecutor accusing Mr. Rangel of violating Congressional rules were not in dispute and that the congressman himself had not refuted the charges.

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Sex Rehab centers are springing up like flowers in spring time.

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A perfect example of the unbiased coverage offered by Fox News.

News of Note: 11/13/2010

The Wonk Monkey is glad it is the weekend, now for the news.

Aung San Suu Kyi is finally free after seven years of house arrest.

In the Presidents weekly address he is targeting earmarks. However, he calls congress to task on this as well.

“That’s why I’ve submitted to Congress a plan for a three-year budget freeze, and I’m prepared to offer additional savings,” Obama said. “But as we work to reform our budget, Congress should also put some skin in the game.”

Abortion, of all things, is turning out to be a political winner for Democrats in some states.

By branding Republican challengers as outside the cultural mainstream on the issue, Democrats managed to hold on to at least a slice of the political center by courting and winning over moderate women in a handful of key states.

Few of the upcoming contenders for the Presidential Election in 2012 have served in the military.

Of the 16 top GOP presidential prospects for 2012, only Rep. Ron Paul and Texas Gov. Rick Perry have ever served in the Armed Forces. Since President Barack Obama also never served in the military, the odds are that in two years, Americans are likely to cast their votes in the first presidential race in nearly 70 years where neither major party nominee has ever worn the nation's uniform.

The new Democratic leadership in the House is starting to take shape.

House Democrats have reached a deal to keep both Reps. Steny Hoyer and James Clyburn in the leadership, with Hoyer (D-Md.) serving as minority whip and Clyburn (D-S.C) taking a new, as-yet-still-undefined number three position.

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Politifacts of the Day:

It is Mostly True when President Bush said: that the ratio of the deficit to gross domestic product during his time in office "was lower than Ronald Reagan's by half. Lower than my dad's. And only [worse than] Bill Clinton among modern presidents. ... My debt to GDP was the lowest or one of the lowest of modern presidents. My taxes to GDP was the lowest and my spending to GDP" was too.

The younger Bush went from a 1.3 percent surplus to a 3.2 percent deficit, a decline of 4.5 percentage points. The best was Clinton, who moved the deficit from a 3.9 percent deficit to a 2.4 percent surplus -- a positive change of 6.3 percentage points. The other presidents all had changes up or down that were roughly two percentage points or smaller.

This suggests that Bush's fiscal record wasn't so sterling if you use a different measure than the one he did. But to analyze the accuracy of his statement, we'll stick closely to the words he used. George W. Bush is correct that he outperformed his father, Reagan and (mostly) Clinton. So if you consider those the "modern" presidents, he's essentially right. If you broaden the "modern presidents" to include those serving in the entire post-World War II period, Bush is about average. While we wouldn't have chosen to define the "modern presidents" to include just the four that Bush mentioned by name, we'll give him some deference in framing the question. So we rate his statement Mostly True.

Need to Know for 11/12/2010

Flexible spending accounts are about to get more restrictions, for example, you will need a prescription to get a drug covered.

The GOP is having an internal battle over cutting military spending in order to reduce the deficit.

Sadly, a second case has been revealed where a potentially innocent man may have been executed on faulty evidence.

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Politifacts of the day:

Pants on Fire to whoever is sending out the email saying: "Pres. Obama's finance team is recommending a . . . 1% tax on all transactions at any financial institution."

 

It was False when Rand Paul said: "The average federal employee makes $120,000 a year. The average private employee makes $60,000 a year."

Most people hearing that would assume he was talking about salary alone, but  he was talking about total compensation, including benefits such as retirement pay and paid holidays. Although studies show federal employees typically earn more than their private-sector counterparts, the difference is nowhere near as much as the doubling Paul says. So we rate his statement False.

 

It is True that the federal gas tax has not been raised since 1993.