John Irons's Blog


Economic News, Data and Analysis

It’s a girl!

Alice Bay Irons, born Monday…
Alice photo

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NYTimes Magazine on Obamanomics

Long article on Obama and economics coming this weekend. Haven’t read it yet, but noted this quote which I think sums up much of Obama’s approach.

Magazine Preview – Barack Obama, A Free-Market-Loving, Big-Spending, Fiscally Conservative Wealth Redistributionist –

“My core economic theory is pragmatism,” [Obama] said, “figuring out what works.”

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McCain and Obama tax plans diverge on wealth

One for the clips file from LA Times…

McCain and Obama tax plans diverge on wealth – Los Angeles Times

McCain and Obama tax plans diverge on wealth
True to party doctrine, the GOP candidate’s economic proposals would ease the burden on the rich, while the Democratic candidate’s would increase it.
By Stephen Braun, Los Angeles Times Staff Writer
August 21, 2008
WASHINGTON — One in a series of occasional stories
— The sharpening rhetoric between John McCain and Barack Obama over their competing plans to overhaul the nation’s tax system has underscored one of the most profound differences between them — how they would target America’s wealthiest taxpayers.
Democratic-leaning economists say McCain’s plan offers little new aid to squeezed middle-class families. And they question whether corporations and wealthy Americans would convert McCain-era tax savings into new investments that would bolster the economy.
“McCain does nothing about income inequality,” said John Irons, research and policy director for the Economic Policy Institute, a center-left think tank backed by labor interests. “It’s skewed toward upper-income Americans to the exclusion of most everyone else.”

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Phil “nation of whiners” Gramm returns…

Phil Gramm – who called Americans a bunch of whiners about the economy – seems to be back in favor at the McCain camp.

Op-Ed Columnist – It’s the Economy Stupor – Op-Ed –

Meanwhile, The Times reports that, according to associates, Mr. McCain still “dials up” Phil Gramm, the former senator who resigned as co-chairman of the campaign after calling America a “nation of whiners” and dismissing the country’s economic woes as nothing more than a “mental recession.” And Mr. Gramm is still considered a top pick for Treasury secretary.

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Did the 2008 US tax rebates work?

New research by Broda/Parker suggests the answer is “yes”. The rebate checks seem to have increased consumption.

Did the 2008 US tax rebates work? | vox – Research-based policy analysis and commentary from leading economists

This spring, the US government handed out $100 billion in tax rebates. Twentieth century economic thinking – permanent income hypothesis, Ricardian equivalence, and the like – suggests that most would have been saved, as Martin Feldstein recently argued. Not so. Recent research on microdata shows that the typical family increased spending by 3.5% when the rebate arrived, boosting overall nondurable consumption by 2.4% in 2008Q2. The number should be 4.1% in 2008Q3.
The Economic Stimulus Act of 2008 was aimed at increasing disposable income temporarily through tax rebates in the hope this would stimulate spending and end or at least mitigate the severity of a US economic slowdown. We find that to a significant extent they succeeded. The stimulus payments are initially being spent at significant rates. These rates are slightly higher than those observed in 2001 when fiscal policy has been credited with helping end the 2001 recession.

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Who’d give more to the middle class?

In the wake of McCain’s latest misleading ad, MSNBC echoes the Tax Policy Center’s analysis:

Who’d give more to the middle class? – First Read –

From NBC’s Domenico Montanaro
McCain claims in an ad released today that “Obama voted to raise taxes on people making just $42,000. He promises more taxes on small business, seniors, your life savings, your family.”
But when it comes to promises, it’s worth pointing out that, according to the non-partisan Tax Policy Center’s analysis of both candidates’ proposed plans, Obama would cut taxes for those making in the range of $38,000 to $66,000 three to almost eight times more than McCain would.
Under Obama’s plan, according to the center, by 2009, those making $37,595 would see an average increase in their income of 3.6%, or a tax cut of $892; those making an average of $66,354 would see an increase in their income of 2.4%, or a tax cut of $1,042.
On the other hand, Under McCain’s plan, those making $37,595 would see an increase in their income of only about 0.5%, or $113 tax cut; those making $66,354 would see only an increase of 0.7% in their income, or a tax break of $319.

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Collender on Bush Midsession Review: “Absolute Silliness”

Looks like I have some night-time reading with Bush’s final budget document. Here’s Stan Collender:

Bush Midsession Budget: Absolute Silliness | Capital Gains and Games

There is also absolutely no indication that the White House understands in any way that this year’s deficit is not just the result of things that have happened the past few months,. Nussle’s statement indicates that had it not been for the need to deal with the economic slowdown, all would be well in the budget world.
That’s just plain silly. The policies put in place in the first seven years of the Bush administration — with the president’s full and active support, encouragement, and insistence — have more to do with the current fiscal situation than anything that has happened since this past January. There are many, but the most important are:
* The tax cuts enacted in 2001 and 2003
* The more than $500 billion spent on activities in Iraq and Afghanistan
* Medicare Part D
* The big increases in the national debt and corresponding increases in annual interest payments
All of these dwarf the amount that will be spent in the “bipartisan growth package.”
The silliness continued…

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Candidate’s Energy Policy

Obama has been pushing hard on energy policy recently. His comprehensive approach combines a broad-based approach to carbon reductions (through cap-and-trade) with a variety of targeted incentives to move us to a more efficient economy fueled by renewable energy. The plan also comes with rebates to help consumers get by. Details here and bullets below.
McCain’s approach is all about drilling and nuclear. It’s pretty thin by way of actual policy. What do I mean thin on policy? His documents say he “supports Flex-Fuel vehicles” but there is no policy, he simply “calls on automakers” to make a faster switch. He says cellulosic ethanol shows “great potential” but does not offer solutions to speed the development. He says modernizing the electric grid would save energy, but only says he will “reduce red tape” to allow for more investment. The only real substance is a $2 billion support of the coal industry and his cap-and-trade policy (though the later is flawed in how it allocates permits). More drilling and a gas tax holiday are purely gimmicks that will have little or no impact on consumers.

New Energy for America

Obama’s comprehensive New Energy for America plan will:

  • Provide short-term relief to American families facing pain at the pump
  • Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future.
  • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined
  • Put 1 million Plug-In Hybrid cars — cars that can get up to 150 miles per gallon — on the road by 2015, cars that we will work to make sure are built here in America
  • Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025
  • Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050

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