The Case For More Government

NYT:

Last month, four academics — Jeff Madrick from the Century Foundation, Jon Bakija of Williams College, Lane Kenworthy of the University of California, San Diego, and Peter Lindert of the University of California, Davis — published a manual of sorts. It is titled “How Big Should Our Government Be?” (University of California Press).

“A national instinct that small government is always better than large government is grounded not in facts but rather in ideology and politics,” they write. The evidence throughout the history of modern capitalism “shows that more government can lead to greater security, enhanced opportunity and a fairer sharing of national wealth.”

The scholars laid out four important tasks: improving the economy’s productivity, bolstering workers’ economic security, investing in education to close the opportunity deficit of low-income families, and ensuring that Middle America reaps a larger share of the spoils of growth.

Their strategy includes more investment in the nation’s buckling infrastructure and expanding unemployment and health insurance. It calls for paid sick leave, parental leave and wage insurance for workers who suffer a pay cut when changing jobs. And they argue for more resources for poor families with children and for universal early childhood education.

This agenda won’t come cheap. They propose raising government spending by 10 percentage points of the nation’s gross domestic product ($1.8 trillion in today’s dollars), to bring it to some 48 percent of G.D.P. by 2065.

That might sound like a lot of money. But it is roughly where Germany, Norway and Britain are today. And it is well below government spending in countries like France, Sweden and Denmark.

To me, this seems like common sense.  But I've yet to be able to convince any of my neighbors that that is the case.  I think the article hits on an important note: that people are fine with programs that benefit them, but they are sure the "lazy blacks" or whoever are unfairly benefiting from their tax dollars.

Personally, I think the biggest job creation plan of all would be a national healthcare plan that took the burden of the provision of health insurance from employers and put the government in charge of cost-control.  For-profit health insurance makes zero sense whatsoever, and higher income tax rates on the truly wealthy might convince doctors they don't need so much income to keep up with the hedge fund assholes and overpaid attorneys (not to say anything about entertainers, athletes and untalented reality stars like Donald Trump and Paris Hilton).

Sure, a lot of unique ingredients contributed to the egalitarianism and shared prosperity (amongst white folks) of the post-war years, but I feel confident that a progressive income tax and government investment and transfers contributed significantly.  I don't think it is a coincidence that income inequality increased as top marginal tax rates and government programs for the poor decreased.  But, hey, what do I know?  I'm just a stupid farmer (who gets plenty of help from the government, in spite of being pretty well off.)

Tea Party Poster Boy Huelskamp Losing Primary Election

Kansas City Star:

Huelskamp, the chairman of the House Tea Party Caucus, has garnered a lot of attention as well as scorn during a combative tenure that saw him booted off the House Agricultural Committee.
With 13 percent of precincts reporting in the western Kansas district, Huelskamp trailed with 41 percent of the vote to Marshall’s 59 percent.
Marshall, an obstetrician from Great Bend, gained the endorsement of the Kansas Farm Bureau — giving him some clout against Huelskamp’s backing from anti-abortion and gun-rights groups, as well as the Club for Growth and the National Federation of Independent Business.
Huelskamp rode into office in the 2010 tea party rout and was part of standoffs, including tension around the government shutdown in 2013, that drove former House Speaker John Boehner from office a year ago.

A little background:

Kansas farmers are taking on some of America’s most powerful conservative interests in an attempt to oust U.S. Representative Tim Huelskamp, a Tea Party favorite kicked off the House Agriculture Committee for ideological rigidity.
The Club for Growth and the Koch brothers, whose Koch Industries Inc. is based in Wichita, are backing Huelskamp, who opposed a farm bill providing crop insurance farmers deem vital -- which former Speaker John Boehner backed. For farmers, little means more than Huelskamp’s opposition to the bill and loss of his committee seat, marking the end of almost a century of Kansas representation. Agribusiness groups support Republican primary challenger Roger Marshall, an obstetrician who says regaining the state’s voice on farm matters is his first priority.
“As a farmer or a rancher, we need the safety net of the farm bill,” said Orrin Holle, a Rawlins County farmer. “Western Kansas, which is most of his district, sees severe droughts.”
The Aug. 2 primary may show the limits of the anti-establishment politics that have swept Kansas. In 2012, Governor Sam Brownback, promising a “real live experiment” for Tea Party policies, won enactment of broad tax cuts. The resulting $400 million budget hole forced public schools to end the school year early and led Standard & Poor’s to downgrade Kansas’s credit one step to AA, third-highest, and to put it on watch for further reductions.
Brownback won re-election, but the state’s Republican Party was bitterly split. Huelskamp’s loss of the Agriculture Committee seat provides another test of the state’s faith in ideology over pragmatism....
Huelskamp, a 47-year-old, fifth-generation farmer from Fowler who began his tenure in 2011, said he’s sensitive to constituent needs.
“Crop insurance was my first, second, third priority in the farm bill and it was in there,” he said. He voted against the bill, he said, because it didn’t require stricter work requirements for the more than 46 million Americans seeking food stamps at the time.

The Tea Party has always been playing with fire when it comes to voting against the Farm Bill because they hate food stamps.  They should be smart enough to know that urban Congressmen only vote for the Farm Bill because of the food stamp program, but as we've seen, Tea Party congressmen aren't that smart.  Goodbye, Mr. Huelskamp.  I'm not going to miss you.

Read more here: http://www.kansascity.com/news/politics-government/election/article93390117.html#storylink=cpyKansas farmers are taking on some of America’s most powerful conservative interests in an attempt to oust U.S. Representative Tim Huelskamp, a Tea Party favorite kicked off the House Agriculture Committee for ideological rigidity.
The Club for Growth and the Koch brothers, whose Koch Industries Inc. is based in Wichita, are backing Huelskamp, who opposed a farm bill providing crop insurance farmers deem vital -- which former Speaker John Boehner backed. For farmers, little means more than Huelskamp’s opposition to the bill and loss of his committee seat, marking the end of almost a century of Kansas representation. Agribusiness groups support Republican primary challenger Roger Marshall, an obstetrician who says regaining the state’s voice on farm matters is his first priority.
“As a farmer or a rancher, we need the safety net of the farm bill,” said Orrin Holle, a Rawlins County farmer. “Western Kansas, which is most of his district, sees severe droughts.”
The Aug. 2 primary may show the limits of the anti-establishment politics that have swept Kansas. In 2012, Governor Sam Brownback, promising a “real live experiment” for Tea Party policies, won enactment of broad tax cuts. The resulting $400 million budget hole forced public schools to end the school year early and led Standard & Poor’s to downgrade Kansas’s credit one step to AA, third-highest, and to put it on watch for further reductions.
Brownback won re-election, but the state’s Republican Party was bitterly split. Huelskamp’s loss of the Agriculture Committee seat provides another test of the state’s faith in ideology over pragmatism.

NASA Photo of the Day

July 30:

Ripples Through a Dark Sky
Image Credit & Copyright: P-M Hedén (Clear Skies, TWAN) Explanation: Sunlight ripples through a dark sky on this Swedish summer midnight as noctilucent or night shining clouds seem to imitate the river below. In fact, the seasonal clouds often appear at high latitudes in corresponding summer months. Also known as polar mesospheric clouds, they form as water vapor is driven into the cold upper atmosphere. Fine dust supplied by disintegrating meteors or volcanic ash provides sites where water vapor can condense, turning to ice at the cold temperatures in the mesosphere. Poised at the edge of space some 80 kilometers above, these icy clouds really do reflect sunlight toward the ground. They are visible here even though the Sun itself was below the horizon, as seen on July 16 from Sweden's Färnebofjärdens National Park.

Riders of the Well of Death

RIDERS OF THE WELL OF DEATH from Erik Morales on Vimeo.

GDP Growth Disappoints

WSJ:

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.
The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.
Total growth this expansion ranks just 8th of the past 11 cycles. The U.S. economy, at the end of June, was 15.5% larger than it was when the recession ended in 2009.
The current expansion remains smaller than the one during Richard Nixon‘s administration. And that 16% expansion lasted just three years. The economy grew 18% from 2001 through 2007. It grew 52% from 1961 through 1969.
Despite the current expansion’s lack of intensity—or perhaps because of it—it is now one of the longest.

The chart which accompanied the article is very telling.  Since the 1980-1981 recovery, every recovery has come with a lower GDP growth rate than the one before it.  I think it is notable that each recession during this time period has resulted in the permanent loss of manufacturing jobs.  To me, it seems like a simple explanation that GDP growth has decreased as the middle class has decreased.  As long as we keep losing good-paying jobs and replacing them with lower-paying jobs, we are going to see anemic GDP growth.  The real question is how we can end this crapification of the economy.