December 2011

Better Obama odds in 2012?
PAUL KRUGMAN says I've got it wrong with regards to the impact of the Tax Cut deal on Barack Obama's electoral prospects. He says that it's the rate of growth in the election year that matters, not the level. And fair enough; Larry Bartels does find that the higher the growth rate in the election year the better, and Mark Zandi's estimates show the American Economy growing at 3.4% in 2012 with the deal, compared to 4.2% without it. But let me make two points. First, consider what Mr Krugman said...

Obamas Hostage Deal
By Paul Krugman NYT I’ve spent the past couple of days trying to make my peace with the Obama-McConnell tax-cut deal. President Obama did, after all, extract more concessions than most of us expected. Yet I remain deeply uneasy — not because I’m one of those “purists” Mr. Obama denounced on Tuesday but because this isn’t the end of the story. Specifically: Mr. Obama has bought the release of some hostages only by providing the G.O.P. with new hostages. About the deal: R

December 2011
Paul Krugman's blog NYT On the straight economics, the tax deal is worth doing. But the history of the past two years drives home, if anyone doubted it, that Economic Policy must be considered from a political economy point of view; that you have to think ahead to how current policies affect the environment in which future policies will be decided. And the more I work on this, the more concerned I’m becoming. We already knew that extending the Bush Tax Cuts makes it more likely that they’l...

Mope And Cringe...
Everyone gets everything he wants. I wanted a mission, and for my sins they gave me one. Brought it up to me like room service. - Capt. Benjamin Williard, Apcalypse Now It's funny, but have you ever noticed that the vaunted liberal conscience of Paul Krugman always seems to allow him to accept a Democratic sell-out when a good fight is what is needed? I’ve spent the past couple of days trying to make my peace with the Obama-McConnell tax-cut deal. President Obama did,...

Not A Cunning Plan
Yesterday, I was criticizing the tax deal and some of its more imaginative defenders. Jonathan Bernstein picked up on the second part and responds: The problem is that Obama either had to abandon the core commitment to end the Bush-era Tax Cuts for the rich, or the core commitment to continue Bush-era Tax Rates for everyone else. He didn’t have the votes to keep both core commitments. End of story. I mostly agree with that. Once Obama insisted on a certain agenda during this final sessio...

The Coming Payroll Tax Fight
Paul Krugman thinks the tax deal hurts President Obama’s chances of re-election. The Democratic parts of the deal will be on the verge of expiring [at the end of 2011], while the Republican parts will have another year to run. Won’t that put the Dems in a desperate position? Won’t Obama be strongly tempted to make further big concessions to get something to boost The Economy for another year? This seems to me upside down. President Obama will have an issue to advance in 2011: renewal...

Obamas Tax Deal Could Damage 2012 Re-Election Chances
Using projections from Moody’s analyst Mark Zandi, Paul Krugman came to the conclusion that the Obama-McConnell tax deal could end up hurting President Obama’s 2012 re-election bid by reducing growth rates in the critical months leading up to the election. From Krugman: Look at the Zandi estimates: they show a boost to The Economy in 2011, which is then given back in 2012. So growth is actually slower in 2012 than it would be without the deal. Now, what we know from lots of politi...

Let's discuss the "failed economicy policies of President George W. Bush
Are you better off today under the leadership of President Barack Hussein Obama than you were during the two terms of President George W. Bush? Let's not even go near the issue of feeling safer from the acts of Jihadists and the embarassment the current President showed during his international bowing tour appologizing to the world for America's greatness. Polls released today by Bloomberg indicate more than 50% of Americans say they are worse off now than they were two years ago when Presiden...

Swindle of the Year
Barack Obama won the great tax-cut showdown of 2010. Barack Obama won the great tax-cut showdown of 2010 — and House Democrats don’t have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package. It will pump a Trillion borrowed Chinese dollars into the U.S. economy over the next two years — which just happen to be the two years of the run-up to the next presidential e...

Rich Liberals Livid Obama Didnt Hike Their Taxes
The LA Times talked to some wealthy Obama Donors who are threatening to not donate to the 2012 Campaign because of Obama’s Compromise with the GOP on extending the Tax Cuts for another two years. From the article: Democratic operatives are already laying plans to set up new independent expenditure committees that can raise unlimited funds, and hope to enroll early contributors to establish a beachhead for the coming campaign. But some stalwart party Donors are vowing to withhold funds beca...

Stimulus 2?
Krauthammer, the most influential voice on the right, buys the Administration's argument about the Tax Cut Compromise -- and doesn't like it: Barack Obama won the great tax-cut showdown of 2010 - and House Democrats don't have a clue that he did. In the deal struck this week, the president negotiated the biggest stimulus in American history, larger than his $814 billion 2009 stimulus package....

The tax cuts and 2012
DADT didn't fail. The Senate did. Paul Krugman thinks the Tax Cut deal might hurt President Obama's Reelection chances. To understand his argument, you need to see this graph from political scientist John Sides, which tests Presidential Election outcomes against income growth in the preceding four years and income growth in the year of the election: Basically, election-year income growth matters much more than total income growth. Krugman's concern is that some of the provisions in the Tax Cut p...

Taxophiliac
Paul Krugman writes: “But a large part of the Tax Cuts, especially those for the wealthy, would not be spent, so the tax-cut extension increases the Budget Deficit a lot while doing little to reduce Unemployment” (“Obama’s Hostage Deal,” Dec. 10). Prof. Krugman is unfair to your readers in his failing to at least acknowledge the main argument that many Economists offer against raising Tax Rates.  This argument is that higher tax rates on incomes and capital-gai...

Bush Economic Hands Skittish On Obama Tax Deal: 'I'd Take Gridlock' Instead
Source: Huffington Post WASHINGTON -- President Obama may not be able to shake the legacy of his predecessor's economic policies, succumbing to the "trap" they put in place with respect to Tax Cut policy, as former Bush political hands gleefully noted. But among the economic advisers that staffed the pervious White House, the consensus on the deal that Obama cut to extend the current rates for at least two more years is decidedly mixed, if not somewhat sour. Andrew Samwick, a Dartmouth Professor...

Krauthammer: Democrats Eating Their Own
Call it a “communications problem”.  That’s undoubtedly what President Barack Obama will do following the often vicious exchanges between the President and members of his own party over the Tax Cut deal he cut with Republicans.  One Democrat (as yet, unidentified) was heard to mutter “F…. the President” when a CSPAN mic was left open….it’s that bad.   Meanwhile, back at Foggy Bottom, Charles Krauthammer says the Democrats wouldnR...

More on the Tax Deal
Thu Dec. 9, 2010 6:37 PM PST This is going to be unbearably wonky, so I apologize in advance. But I was thinking some more about Paul Krugman's contention that Obama's tax Compromise plan might hurt his Reelection chances rather than help them. He bases this on two things. First, Mark Zandi's economic forecast suggests that the tax plan will improve GDP growth in 2011 but reduce it in 2012 (compared to a baseline forecast). Second, Larry Bartels has shown that voters are myopic: they pay far mo...

Do Jobless Benefits Raise Unemployment?
For Democrats, the timing was awkward. On Dec. 7, the morning after President Barack Obama announced a tax-and-spending deal with congressional Republicans that will extend Unemployment Benefits for another 13 months, the Bureau of Labor Statistics announced that there were 3.4 million job openings as of the end of October. In other words, millions of jobs are going unfilled at the same time that millions of out-of-work Americans are getting checks for being unemployed. That's red meat for free...

Bob Burnett: Barack Obama: Negotiating With Vipers
In his inaugural address, John Kennedy said, "Let us never negotiate out of fear, but let us never fear to negotiate." JFK was referring to US deliberations with Russia, but his words apply to the current political reality. President Obama's Tax Cut "deal" was negotiated out of fear. The President knows this. In his December 7th Press Conference Obama acknowledged: "...the middle-class tax cuts were being held hostage to the high-end tax cuts. I think it's tempting not to negotiate with hosta...

Bloomberg: Yesterday was 'Depressing'
Mayor Michael Bloomberg weighed in on Washington this morning on his Radio Show with John Gambling, and he didn't like what he saw, at least what he saw yesterday when the 9/11 Health bill, Don't Ask Don't Tell and the Compromise on the Bush Tax Cuts all hit considerable road blocks. "I thought it was really depressing yesterday," the mayor said. "The Senate refused to pass the Zadroga bill and the House refused to pass the Compromise bill which the president negotiated with the Republicans. T...

Consumer sentiment up more than expected
NEW YORK | Fri Dec 10, 2010 10:32am EST NEW YORK (Reuters) - U.S. consumer sentiment rose more than expected in early December while an index of current conditions jumped to its highest level since January 2008, a survey released on Friday showed. The Thomson Reuters/University of Michigan's preliminary December reading on the overall index on consumer sentiment came in at 74.2, up from 71.6 in November. That was the best level for sentiment since June and the third-highest level since the st...

Like it or hate it, we have a deal
The Tax Cut Compromise between President Obama and Republicans in Congress may not be the best medicine for The Economy or the fairest deal for the American People. However, it was the only deal available given the outcome of the mid-term Elections and the GOP's obstinate insistence on keeping Tax Rates unchanged for the highest earners. Democrats in Congress have good reason to dislike this deal, but they'll just have to swallow hard and accept it because there is no realistic alternative. Ther...

Columnists see opposites in tax-cut Rorschach
In the fervid logic of partisan debate in Washington, Charles Krauthammer and Paul Krugman are in absolute agreement about why the new tax deal is terrible for America – because it gives a win to the other side. They just get there by stating the case in completely opposite terms. Continue Reading Text Size - + reset Politico 44 To Krauthammer, perhaps the most influential newspaper columnist on the right, President Barack Obama pulled a fast one on the Republicans – by sneaking...

TGIF Roundup: Deficit Dissonance
By Joseph B. White It will be another day of budgetary Cognitive Dissonance in Washington. The Senate’s proposed tax bill, unveiled Thursday night, will cost $858 billion over ten years. Besides extending the Bush era Tax Cuts for all filers, the plan adds a few sugar plums such as a continuation of subsidies for Ethanol and Alternative Energy technology. House Democrats are in revolt, vowing to block the bill — allowing President Barack Obama an opportunity to play against the liberal wi...

Secondary Sources: Local Governments, Europe, Tax Calculator, Grinchonomics
By Phil Izzo A roundup of economic news from around the Web. - Local Government Stress: The Congressional Budget Office released a report on stress on local governments that includes a section on addressing the problems. “If a state was under great fiscal stress, it could default on its Debt, but the last state to do so was Arkansas in 1933. The Federal Government could not take control of a state’s fiscal operations, primarily because the U.S. Constitution protects the states from ...

Early Morning Swim: Jane Hamsher, Alan Grayson and Ralph Nader Discuss Tax Cut Deal on Lawrence ODonnell
Krugman weighs in: This political reality makes the tax deal a bad bargain for Democrats. Think of it this way: The deal essentially sets up 2011-2012 to be a repeat of 2009-2010. Once again, there would be initial benefits from the stimulus, and decent growth a year before the election. But as the stimulus faded, growth would tend to stall — and this stall would, once again, come in the months leading up to the election, with seriously negative consequences for Mr. Obama and his party. You ...