John Irons's Blog

Icon

Economic News, Data and Analysis

AWMAG

What do George Akerlof, Jesse Ventura, Eminem, and Richard Kogan have in common?

Apparently they are all Angry White Men Against Bush.

Angry white economists should watch
Eminem’s latest video.

Angry white rappers should read Akerlof’s Election 2004: Fiction vs. Reality, and Kogan’s President Bush, the Federal Budget, and Deficits.

And then there’s Jesse.

Advertisements

Filed under: Economists

Uh, OK. So starbucks is now ‘manufacturing’

No, I’m not making this up. Apparently, coffee roasting is now “manufacturing.”

Magic City Morning Star: Correcting the Record on Starbucks
Correcting the Record on Starbucks
By Matthew Mors
Oct 25, 2004, 12:25
To the Editor:
I wish to draw your attention to an error in a column written by the Honorable Senator Susan M. Collins that you published Friday (“Taking a Stand Against Tobacco and Special Interests”). In her column about the Congressional manufacturing-related tax legislation (FSC/ETI), the senator writes, β€œ… the bill includes a generous tax break for coffee brewers, allowing corporations like Starbucks to define themselves as “manufacturers.”
Taxation on brewing coffee is not affected by this bill. The activity defined within the context of the legislation is coffee roasting; precisely the kind of activity that Congress intends to encourage in the bill: manufacturing that generates hundreds of U.S. jobs in the production of products for sale domestically and overseas.
Starbucks Coffee Company searches for the highest-quality coffee beans in the world, which are shipped to one of our four roasting plants. Three of these plants are in the U.S: Kent, Washington; Carson City, Nevada; and York, Pennsylvania. These U.S. plants employ hundreds of workers, who transform the raw material–green coffee–into roasted coffee that is then sold at Starbucks stores and other outlets around the world.
The members of Congress recognized that coffee roasting is true manufacturing in the value it adds to coffee beans, unlike restaurant food processing or brewing, provisions excluded in this bill.
Thank you for the opportunity to present these facts.
Regards,
Matthew Mors
Media Relations
Starbucks Coffee Company

Filed under: Economics

Budget Failures

Budget Failures – Center for American Progress
“While temporary deficits in times of recession are seen by many to be a logical and desirable result of an economic downturn, the current situation is an undesirable failure of policy.”

Filed under: Economics, Economy, Fiscal Policy

Center for American Progress

So, as of yesterday, I have begun a new gig at the Center for American Progress.
Just to be clear, I should issue a broad based disclaimer that this site has no affiliation with the center, and that all opinions expressed here are my own.
Using the language of Max Sawicky at EPI…
This is a personal web site. It is not a production of the Center for American Progress. Statements on this site do not represent the views or policies of the Center for American Progress. Preferences for electoral candidates posted on this site have not been prepared using any Center for American Progress resources.
Yadda, yadda, yadda.
Yours truly, JSI

Filed under: Website

Leaving OMB Watch

Sent this out today….

Dear friends and colleagues,

As many of you know by now, I will shortly be leaving OMB Watch, having accepted a position at the Center for American Progress as the Associate Director for Tax and Budget Policy. I will continue to work on economic policy, including federal tax and budget issues, as part of their economic policy group.

I have been very happy here at OMB Watch, and I fully support the organization and its mission. OMB Watch’s federal budget work will, of course, continue. We are in the process of hiring a senior budget analyst (see http://www.ombwatch.org/article/articleview/2425) to work with our recently hired policy analyst Becky Lewis (lewisb@ombwatch.org).

It has been a great pleasure to work with you during my time at OMB Watch, and I look forward to working with many of you in my new capacity as well.

Best regards,

John Irons

Filed under: Website

Economist Poll

The Economist Magazine polled academic economists on Bush economic policies.
Apparently the academic economists agree with the B-school profs (see below).
From Poll of Academic Economists:
Economists are not fond of the Bush tax cuts – 72 percent said that the tax cuts were bad or very bad.
Only 4 percent thought that the prescription drug plan was good, no one thought it was very good.
Only 14 percent thought that Bush trade policy was good.
Overall only 9 percent thought that Bush’s economic policies were good or very good.
41 percent thought the Kerry plan was good or very good, as compared with just 16 percent for Bush. On 6 of 7 issue areas, Kerry fared better than bush, including “fiscal disclipline” where Kerry was rated as having a better policy by a 79% to 18% margin.

Filed under: Economics

Business School Profs On Bush Economic Policy

Well over 100 tenured business school professors signed a letter to Bush about his economic policy… and they’re not happy.
Some of the letter is below, a good article about it is at Harvard’s The Crimson.

Open Letter to President
As professors of economics and business, we are concerned that U.S. economic policy has taken a dangerous turn under your stewardship. Nearly every major economic indicator has deteriorated since you took office in January 2001. Real GDP growth during your term is the lowest of any presidential term in recent memory. Total non-farm employment has contracted and the unemployment rate has increased. Bankruptcies are up sharply, as is our dependence on foreign capital to finance an exploding current account deficit. All three major stock indexes are lower now than at the time of your inauguration. The percentage of Americans in poverty has increased, real median income has declined, and income inequality has grown.
The data make clear that your policy of slashing taxes – primarily for those at the upper reaches of the income distribution – has not worked. The fiscal reversal that has taken place under your leadership is so extreme that it would have been unimaginable just a few years ago. The federal budget surplus of over $200 billion that we enjoyed in the year 2000 has disappeared, and we are now facing a massive annual deficit of over $400 billion. In fact, if transfers from the Social Security trust fund are excluded, the federal deficit is even worse – well in excess of a half a trillion dollars this year alone. Although some members of your administration have suggested that the mountain of new debt accumulated on your watch is mainly the consequence of 9-11 and the war on terror, budget experts know that this is simply false. Your economic policies have played a significant role in driving this fiscal collapse. And the economic proposals you have suggested for a potential second term – from diverting Social Security contributions into private accounts to making the recent tax cuts permanent – only promise to exacerbate the crisis by further narrowing the federal revenue base.
More…

Filed under: Economics

By the Numbers!

Another article in the Economy and Jobs Watch series by the staff economist at OMB Watch (aka. me).

Economy and Jobs Watch: The Lost Years — by the Numbers

Over the past 4 years there has been a dramatic shift in the nation’s fiscal policy. Has the new strategy worked? The numbers indicate it has not.

Employment:

January 2001: 132,388,000
August 2004: 131,475,000
          Decline of 913,000

Note: Data seasonally adjusted.
Source: Bureau of Labor Statistics.

Real Gross Domestic Product:

2001 Q1: $9,875 billion
2004 Q2: 10,784 billion
          Average annual increase 2.6%*

*Over the same period in his term, President Jimmy Carter had a better growth rate (2.9%).
Source: Bureau of Economic Analysis.

Stock Market — Dow Jones Average:

Jan. 2, 2001: 10,646
Oct. 1, 2004: 10,193
          Decline: 4.3%*

* The poor stock market performance over the past several years cannot be explained simply by pointing to the events on 9/11. The Dow Jones Average on Sept. 10, 2001 was 9,431. When the market reopened on the 17th, the Dow fell 675 points by the close of the day. Less than 2 months later, the Dow had already recovered all of its ground and more, and by the end of that year it reached 10,000.

Source: Yahoo! Finance

Deficit

Fiscal year 2000: +$236 billion — Surplus
Fiscal year 2004: – $422 billion — Deficit
          Decline of $658 billion

Source: OMB and Congressional Budget Office

Poverty Rate

2000: 11.3%
2003: 12.5%
          Increase 1.2 percentage points

Source: Census Bureau

Median Household Income (in inflation adjusted 2003 dollars)

2000: $44,853
2003: $43,318
          Decline $1,535

Source: Census Bureau

Filed under: Economics, Economy

Stiglitz ain’t happy – perhaps shrill?

Nobel Prize winner Joe Stiglitz blames it on Bush…

TomPaine.com – Four Years Of Failure
But these statistics mask a glaring fact: The average American family is worse off than it was three and half years ago. Median real income has fallen by more than $1,500 in real terms, with American families being squeezed as wages lag behind inflation and key household expenses soar. In short, all that growth benefited only those at the top of the income distribution — the same group that had done so well over the previous 30 years and that benefited most from Bush’s tax cut.
For example, some 45 million Americans today have no health insurance, up by 5.2 million from 2000. Families lucky enough to have health insurance face annual premiums that have nearly doubled, to $7,500. American families also face increasing job insecurity. This is the first time since the early 1930s that there has been a net loss of jobs over the span of an entire presidential administration.
Bush supporters rightly ask: is Bush really to blame for this? Wasn’t the recession already beginning when he took office?
The resounding answer is that Bush is to blame. Every president inherits a legacy. The economy was entering a downturn when Bush took office, but Clinton also left a huge budget surplus — 2 percent of GDP — a pot of money with which to finance a robust recovery. But Bush squandered that surplus, converting it into a deficit of 5 percent of GDP through tax cuts for the rich.

[FYI – Here’s the letter from the 10 Economics Nobel Prize Winners that Stiglitz referred to at the end of the article.]

Filed under: Economics

Internet access

The FCC is not looking good. Surely there is a better way to handle the problem than just shutting down all the grants…

Business > Media & Advertising > Internet Grants to Schools Halted as the F.C.C. Tightens the Rules” href=”http://www.nytimes.com/2004/10/04/business/media/04fcc.html?hp”>The New York Times > Business > Media & Advertising > Internet Grants to Schools Halted as the F.C.C. Tightens the Rules
ASHINGTON, Oct. 3 – Public libraries and schools around the nation have suddenly stopped receiving any new grants from a federal program that is wrestling with new rules on how it spends $2.25 billion each year to provide high-speed Internet and telephone service.
The moratorium at what is known as the E-Rate program began two months ago, with no notice, and may last for months, causing significant hardships at schools and libraries, say state officials and executives at the company that runs the program.
The suspension came after the Federal Communications Commission, in consultation with the White House, imposed tighter spending rules that commission officials say will make it easier to detect fraud and waste in the program.
As much as $1 billion in grants the states say they expected to receive by the end of the year may be affected, one official estimate says. That has led state administrators to either take money from other educational programs or postpone paying their phone and Internet companies.

Filed under: Economics

Pages

Archives