David Leonhardt has your rundown:
In a few weeks, Barack Obama will have a chance to do something he hasn’t done particularly well during his first year in office: successfully defy his opponents and, at the same time, reassure his most loyal supporters. At issue is the fate of Craig Becker, one of Obama’s nominees for the National Labor Relations Board (NLRB). Last month, Becker was denied a vote on his nomination when Senate Democrats failed to overcome a GOP filibuster. Now, the Senate’s coming Easter break will give Obama an opportunity to put Becker on the NLRB via recess appointment.
One way to assess the $787 billion federal recovery package—which last month had its one-year anniversary—is the conventional way: as timely, short-term stimulus. And on that point—though the package gets no respect—the consensus among economists is pretty complete, as I recently noted. The stimulus has preserved or created 1.6 million to 1.8 million jobs to date. Ultimately, the package will generate as many as 2.5 million jobs. It is working.
Wal-Mart's enormous leverage over its suppliers has attracted plenty of attention in recent years. Usually, critics home in on the negative impacts. The retailer can dictate prices to factories around the world (after all, a single producer needs Wal-Mart more than vice versa), which encourages ruthless cost-cutting that, in turn, can lead to lower wages and shoddier working conditions. And that's not even the half of it. Barry Lynn wrote a long piece for Harper's in 2006 exploring the pros and cons of Wal-Mart's vast "monopsony" power.
The latest unemployment statistics show a much worse story than had been previously accepted. The Obama administration is now projecting that the unemployment rate will average 10 percent this year, 9 percent in 2011, and more than 8 percent in 2012. It is not projected to get back to a more normal rate until 2016.
Add energy research to the list of arenas in which Team Obama has recognized the power of regional economies to deliver innovation as well as economic growth.
Last week we noticed the spread into multiple federal agency budgets of FY 2011 program proposals aimed at supporting regional industry clusters--the geographic concentrations of interconnected firms and supporting organizations that play such an important role in enhancing regional economic performance.
From its opening pages, the Obama administration’s FY2011 budget request adopts a stance that pervades this blog. Declares the document: “We need to recognize that competitive, high-performing regional economies are essential to a strong national economy.” (See page 20 of the federal budget.)
In line with this recognition, the new budget unveils not one, but several proposals to support regional industry or innovation “clusters” through multiple federal departments. Clusters, as we have noted previously, are a fundamental fact of national economies, and a critical enhancer of regional economic performance. However, as we have also noted, the U.S. lags other nations in providing support to these “bottom-up,” region-based systems of business development, innovation, and talent matching. And so the 2011 budget seeks to change that by applying cluster approaches across multiple segments of the federal delivery system--rather than anchoring it in a single agency.
Along these lines, the administration’s new approach marks a welcome advance over last year’s initial budget request. Last year, the administration seemed to regard “clusters” as a discrete single program to be implemented by only the Economic Development Administration (EDA)--and so took its lumps en route to obtaining only a small portion of its request. This year’s budget, by contrast, treats regional industry networks as more of an operating paradigm for multiple activities, and as more a means to the important end of linking and aligning multiple federal interventions to maximize their impact in support of regional prosperity. (See page 22 of the federal budget.)
Friday’s economic news warranted only lukewarm to cold comfort for those of us hoping for a sustainable, broad-based economic recovery with steadily spreading opportunity.
Top line, the U.S. economy grew at its fastest pace in six years in the last three months of 2009, expanding at 5.7 percent yearly rate over the previous quarter, as businesses accelerated their exports and began to replenish drawn-down inventories and invested more in equipment and software.
Consumer spending was up a bit and exports were up a lot. In fact, exports grew at an annual rate of 28 percent in the fourth quarter, which the National Association of Manufacturers said was the fastest increase and the largest contribution to economic growth in 30 years. Of the 5.7 percent rise in gross domestic product, in this connection, trade accounted for 0.5 percent of the growth, since while exports added 1.9 percent of the growth imports subtracted 1.4 percent. At this rate, the economy probably won’t slide back into a recession and it might even hit President Obama’s State of the Union goal of doubling exports over the next five years.
Libertarians and others from the right-ish side of the ideological spectrum have lately been building a compelling case against worrying about income inequality. Here's Will Wilkinson writing on Cato Unbound in October:
As of late this summer, Democrats in Washington shared a tidy consensus about the economy: The stimulus was working more or less on schedule, and the job market was gradually recovering. That meant the administration could start thinking about how to rein in the country’s yawning budget deficit, if not actually scale it back yet.
What followed turned that tidy consensus into a pigsty. On October 2, the Labor Department announced that September’s job-loss total was roughly 60,000 higher than the previous month's, prompting a hastily convened powwow between the president, House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid. (The number has since been revised downward.) Then, in early November, Democratic candidates handily lost gubernatorial elections in New Jersey and Virginia, with independents deserting the party in droves. “For those up next year, it was a wake-up call on the deficit,” says one Senate Democratic aide. Suddenly, spending more money on jobs didn’t look so appetizing. That is, until the following Friday, when the next jobs report showed the unemployment rate jumping from 9.8 percent to 10.2 percent--clearing a psychological threshold that was no less terrifying for being foreseeable. And on and on it went. “The entire town is more schizophrenic than I’ve ever seen,” says one senior administration official. “Everyone cares about jobs, and everyone cares about fiscal discipline. The weight shifts week by week, unemployment report by unemployment report.”
I await Noam's take, but this seems like awfully encouraging news:
So it's hard not to like today's unemployment report: the economy only lost 11,000 jobs in November, a number so small the Labor Department considers the employment level "essentially unchanged" from October. That's after shedding an average of 135,000 jobs in each of the previous three months. And even that 135,000 figure looks better than it used to.
The Department of Labor’s release last week of the worse-than-expected job numbers for the month of September set off the now typical back and forth debate about whether the federal stimulus is working. Joe Biden, Larry Summers, and Christina Romer have commented that the economy is still moving in the right direction and the loss of 263,000 jobs last month could have been worse had there been no federal stimulus at all. Another army of usual suspects claims that the dismal jobs report is proof that the stimulus package has yet to produce economic recovery.
In a way, both camps are right.
Several commentators have noted that temporary stimulus rebate programs--namely “Cash for Clunkers”--propped up the economy through July and August. Car dealers credited this effort for boosting their sales to the highest levels of the year. The First-Time Homebuyer’s Credit is said to be having a similarly positive impact through the real estate and construction sectors. So, in this sense, short-term federal stimulus has been working.
Yet, because these temporary programs are short-lived, so too are the positive economic benefits they generate. The abrupt end of “Cash for Clunkers” led to a rapid reversal of growth in the auto market with the Big Three automakers seeing their sales decline 33 to 37 percent from August levels. And, the looming November 30th expiration of First-time Homebuyer’s Credit has already sparked concern that without this federal support, the housing markets will just reverse on any recent improvements. Sustained economic recovery, it seems, will likely not result from this sort of short-term stimulus.
There's a bit of a riddle in today's unemployment release from the Labor Department. The release notes that government payrolls were down 53,000 in September, about one-fifth of the total jobs lost last month (which helped drive the unemployment rate up a tenth of a point to 9.8 percent). Now, as it happens, the cracker jack economists at Goldman Sachs actually anticipated this development yesterday, en route to almost perfectly nailing the overall job-loss figure.
CAMBRIDGE, MASSACHUSETTS--Americans spend a lot of time debating whether to let immigrants into the United States. They don't spend a lot of time debating how. And that's a problem, because while immigration supporters have been congratulating themselves for keeping America's doors open, they've barely noticed that the terms of entry are changing. More and more, immigrants are admitted not as potential citizens but as guest workers (a category Americans think only exists in Europe)--people allowed to work for a certain company for a certain amount of time and then told to go home.
The angry populism that forced Zoe Baird to withdraw her nomination as attorney general was expressed as a syllogism. She had broken "the law" (which law, no one was precisely sure); therefore she was not fit to lead the Department of Justice. Taking their cue from their constituents, the senators who demanded Baird's repentance were equally legalistic. "To me this is a big deal, personally," said Senator Joseph Biden, "and I suspect it is to a lot of Americans." "A technical or theoretical violation?" asked Senator Alan Simpson, incredulously.
