John Irons's Blog


Economic News, Data and Analysis

Framing Backlash

Has the Lakoff/Frameworks backlash begun? Will it spread to the “messaging” movement as well?
Inquiring progressives want to know!

The Decembrist
When Democratic politicians, even in California, are so immersed in this Lakoff stuff that they announce, “Okay, now I’m going to reframe the issue,” I think we can all agree that the medicine has been applied, and it’s time to move on.

Filed under: Politics

Talking to Communists

Remarks by John S. Irons (Senior Policy Analyst, and Economist, OMB Watch)
Prepared for the Visit of the Delegation from the Ho Chi Minh National Political Academy (Vietnam) to Temple University
Wednesday, April 22, 2004
It is a pleasure to be here today. I hope I can give you a small taste of the kinds of work that citizen advocacy groups pursue here in the US. Rather than trying to summarize all the kinds of work undertaken by thousands of organizations, I thought it would be more useful to describe my organization in more detail. While each organization is unique and might focus on different policy areas, or take different tactics towards policy change, we often share a similar approach to policy advocacy.
My organization, OMB Watch, is an independent, non-governmental, nonprofit organization whose mission is to promote government accountability and citizen participation.
We believe that a responsive and responsible government must be accountable to the people and must operate in the open. Sound governmental and economic policy, as well as good decision-making, critically depends upon the public’s right to know what the government is doing; and it is important for citizens to provide input on policy choices and to hold their government accountable for their actions.
My organization is devoted to monitoring the activities of the federal government, including the Office of Management and Budget (OMB), other governmental agencies, and throughout the legislative process in Congress.
OMB Watch was formed 20 years ago to lift the veil of secrecy shrouding the powerful White House Office of Management and Budget (OMB) – an agency which oversees much of the executive branch of government and which therefore has a large amount of power to affect the implementation of policy. We receive the vast majority of our funding from grants from private foundations, with private donations from individuals making up most of the rest – we do not receive funding from the government.
The organization’s mission centers on four main areas: regulatory policy; public access to government information; participation in the policy making process by nonprofit organizations; and the federal budget. We are primarily focused on domestic federal policy.
On the regulatory side, we work to monitor the federal government’s rulemaking process, and regulations, especially in the area of the environment. We believe that the government plays an important role in establishing sensible safeguards and protections for workers and the public.
In the area of public access to government, we operate a website called “RTK Net” which provides Internet access to government databases on the environment – the data allows citizens to assess the impact of factories on their local environmental conditions. We also chair an anti-secrecy coalition – made up of nonprofits, journalists, and others – which seeks to advance the public’s right to know and to reduce secrecy in government.
We also believe that an important means for citizen participation is through nonprofit organizations. As a result we also follow issues and policy that would affect the ability of nonprofits to be engaged in policy advocacy. We work to encourage organizations to be more engaged in the policymaking process, and to speak out on matters of importance to them.
As an economist, my work primarily involves the federal budget – both tax policy as well as government expenditures. This includes 1) policy research and analysis, 2) dissemination of government budget information, including explanations of the complexities of the government’s budget, as well as the implications of tax and budget decisions, and 3) organizing other non-profit organizations to effectively speak out on tax and budget issues. We believe that the federal government has a unique, important, and necessary role in society, and work to ensure that the government works in the best interest of all its citizens.
The success of our system of government requires that government operate in the open in order to be responsive to the public, to foster trust and confidence in government, and to encourage public participation in civic and government institutions.
We hope that our (small) organization makes a difference in keeping the government as open as possible, educates others about the importance of citizen participation, and contributes to a healthy and vibrant society.

Filed under: Background, Economics, Economists, Policy, Politics

Recession Dating Questions

Some very good questions from a reader.
FYI, the change in the methodology mentioned below, I assume, refers to the apparent de-emphasis of employment and the additional emphasis placed on monthly GDP estimates by Macroeconomic Advisors.
Also FYI, the political question should be raised since the Martin Feldstein, the head of the NBER and a member of the dating committee, was at the Whitehouse, meeting with G. Bush, the day before the committee released the announcement.
Name: Taxed
Email Address:
I, too, heard that news today, but have heard very little opinion as to whether others agree or disagree; especially considering that the NBER has apparently changed their methods of determining the business cycle. Most importantly, I haven’t heard the opinions of other economists on this determination.
So, my question for you is: Do you agree or disagree with the NBER’s assessment and does it concern you that they changed their methodology to make this determination? Also, is there any possibility that there was a political reason, rather than an academic reason, for the change in their methodology?

Filed under: Economics, Economy, Politics, Recession

Behind the Curve

We’ve had three tax cuts in the past three years, all of which were supposed to have stimulated the economy and added jobs.
So what policy do we need now? More stimulus! (or so says Madrickin the NY Times).

Stimulus Should Focus on Jobs

Many people criticized President Bush’s “growth” policies — mostly tax cuts on income and dividends weighted toward the well-off — for providing too little bang for a buck’s worth of stimulus. This seems ever truer.

Given the disturbing state of the economy, a jobs program is what the nation now needs. It might even be just what the electorate wants to hear.

Filed under: Economy, Fiscal Policy, Policy, Politics, Recession

Revising History

It seems that President Bush is running around claiming that he “inherited an economy in recession.” (See below.)
Just to be clear, the NBER declared the beginning of the recession to be in March 2001, AFTER the current administration took charge.
This isn’t to say that Bush somehow caused the initial recession (although it certainly didn’t help that VP Cheney was running around in the country in late 2000 and early 2001 telling everyone how the economy was in bad shape.)
It is also unlikely that the recession was caused by any Clinton policy – the recession was largely a result of decreases in business investment – and the federal government simply didn’t do anything in the late 1990s that would have had a significant impact on the short-run macroeconomic situation.
The important question is not whose fault is the recession, but rather what has been the response of the administration to the economic situation. We have seen 3 major tax cuts – one per year – totaling around $1.75 trillion over ten years (and this is a gross underestimate since the cost assumes that many of the provisions are allowed to sunset) each of which were sold as economic and job stimulus, but which in reality had very little to do with good counter-cyclical fiscal policy, or with the current economic problems.
The result? Unemployment continued to increase and is up to 6.1%, and there have been 2.5 million jobs lost since March 2001. As a result of the revenue reductions from the tax cuts and the weak economy, the federal budget has gone from a record surplus to a record $400 billion deficit.
We are continually told that the Republican Party is a supporter of personal responsibility. The administration should not be playing the blame game when it comes to the economy, and should take responsibility, at the very least, for the ineffectual policy response and the current dismal budget situation.
The original NBER announcement
The latest update

As 2004 Nears, Bush Pins Slump on Clinton (
With the start of his reelection campaign in the past two weeks, President Bush has revived his pastime of blaming his predecessor, Bill Clinton, for the economic recession.
“Two-and-a-half years ago, we inherited an economy in recession,” he told donors at a Bush-Cheney ’04 reception yesterday in Miami. He has raised the same accusation in fundraising appearances since mid-June in Washington, Georgia, New York, Los Angeles and San Francisco.
It’s a good applause line for a crowd of red-meat political supporters. The trouble is it’s a case of what the president has called, in another context, revisionist history. The recession officially began in March of 2001 — two months after Bush was sworn in — according to the universally acknowledged arbiter of such things, the National Bureau of Economic Research. And the president, at other times, has said so himself.
The bad news came on Nov. 26, 2001. The NBER, led by an informal economic adviser to Bush, Martin Feldstein, pronounced that economic activity peaked in March 2001, “a determination that the expansion that began in March 1991 ended in March 2001 and a recession began.”
At the time, Bush accepted the verdict with perfect accuracy. “This week, the official announcement came that our economy has been in recession since March,” he said in his radio address the next weekend. “And unfortunately, to a lot of Americans, that news comes as no surprise. Many have lost jobs or seen their hours cut. Many have seen friends or family laid off. The long economic expansion that started 10 years ago, in 1991, began to slow last year. Many economists warned me when I took office that a recession was beginning, so we took quick action.”
Until the NBER’s official pronouncement, Bush had avoided the “R” word. He spoke earlier in 2001 of an “economic slowdown” as administration officials noted, correctly, that the pace of economic growth began to slow (but not contract) in 2000, under Clinton’s watch. “In terms of how you call it, what the numbers look like, we’ve got statisticians who will be crunching the numbers and let us know exactly where we stand,” Bush said in October 2001. “But we don’t need numbers to tell us people are hurting.”

Feldstein’s NBER, which earlier said it gives “relatively little weight” to the quarterly growth figures from Commerce, is not joining in the revision. Two weeks ago, it issued an updated report sticking by its assessment that the recession began in March 2001.

Filed under: Economics, Economy, Fiscal Policy, Policy, Politics, Recession

No Excuse

There is no excuse for this Republican delay.

Low-Income Child Tax Credit Must Wait, Republicans Say
Senate Republican leaders said today that because of the press of Medicare legislation, there would be no agreement with the House this month to increase the child tax credit for 6.5 million low-income families.
The announcement means that a final compromise on the credits, if one is reached, may not come until after the government begins sending checks of $400 a child to middle-class families.
The checks, to be sent to about 25 million families, will be mailed starting the week of July 25. Because the House and Senate have been unable to reach agreement on how to proceed with the credits for low-income families, which were left out of the tax bill signed by President Bush last month, the checks for those families could not go out until mid-September at the earliest, Treasury officials have said.

Filed under: Economics, Fiscal Policy, Policy, Politics

Bill Gates and the Estate Tax

I just got back from a press conference sponsored by United for a Fair Economy and Americans for a Fair Estate tax. Bill Gates (Sr.) made a very compelling case for keeping the estate tax arguing that one important reason that the super-wealthy have been able to make/keep vast sums of money is that they are fortunate enough to live in America. And, as good Americans, they owe some of their wealth to the country that made it possible for them to become so wealthy.
FYI – only 2 percent of estates owe any tax, and the first $1 million for individuals, or $2 million per married couple, is tax-free. So, if you leave $1,000,001 to your heir (after deductions for charity), your heir is responsible for only 18 cents in taxes.
The House of Representatives is scheduled to vote on repealing the estate tax tomorrow. The repeal would cost around $162 billion over the next decade, and $1 trillion over the next 20 years.

Americans for a Fair Estate Tax
Americans for a Fair Estate Tax (AFET) is a broad-based non-partisan coalition of nonprofit groups, including civic, labor, social justice, faith-based, and environmental organizations, as well as organizations providing human services. AFET advocates that instead of repealing the tax on multi-million-dollar estates, Congress should reform the estate tax to ensure that family farms and small businesses are not unfairly taxed while keeping 98 percent of taxpayers exempt and safeguarding Medicare, Social Security, education, charities and other key national priorities that would be threatened by a complete repeal.
We are working together to prevent repeal of the estate tax because the estate tax has helped to:
* Build fairness into the tax system, so that the wealthiest taxpayers pay their just share to the public good and insure large accumulations of wealth do not become concentrated;
* Stimulate charitable giving; and,
* Provide federal and state revenues that are used to provide community services, including those for low-income and vulnerable families.
The estate tax has been a part of our tax structure since the founding of the country and since 1916 in its current form. Opponents of the estate tax have spent millions of dollars on ads and a lobby campaign that often contain inaccurate information that leads one to conclude that the estate tax should be repealed.

Filed under: Economics, Economy, Fiscal Policy, Policy, Politics

2003 Tax Cuts: Distribution

So, here is the graph of who benefited from the 2003 tax cut. [Click for a larger view.]
Source: Tax Policy Center | A Project of the Urban Institute & the Brookings Institution

Filed under: Economics, Economy, Fiscal Policy, Policy, Politics

Distribution of the Senate Tax Plan

Just the facts…
Jobs and Growth Tax Relief Reconciliation Act of 2003 as Passed by the Senate:
Distribution of Income Tax Change by AGI Class, 2003

(AG) Income Class Average Tax Change
Less than $10,000 -2
$10,000-$20,000 -97
20,000-30,000 -225
30,000-40,000 -324
40,000-50,000 -445
50,000-75,000 -688
75,000-100,000 -1,597
100,000-200,000 -2,497
200,000-500,000 -4,997
500,000-1,000,000 -15,452
More than 1,000,000 -73,790
All -692

Source: Urban-Brookings Tax Policy Center Microsimulation Model (version 0503-1).
See Tax Policy Center | A Project of the Urban Institute & the Brookings Institution for more distribution tables.

Filed under: Economics, Fiscal Policy, Policy, Politics

T minus 9 days

Nine days until default….
The Senate is currently considering a $1 trillion increase in the debt ceiling, which now stands at $6.4 trillion. Just last year Congress and the President boosted the debt limit by $450 billion.
If Congress does not pass the debt-limit increase by May 28th, the government will not be able to meet its obligations to, among other things, pay social security recipients, make tax refunds, etc.
And Congress is about to pass, and the President is about to sign, the third largest tax cut in history – in the form of a dividend tax cut – that will have very little effect on the economy in the short run…
(Why a $1 trillion increase in the debt? And not something like last years’ 450 million? Well, at the rate of current deficits, that ought to last for the next couple of years, until the end of 2004 at least…) – Treasury Scrambles to Avoid Debt Ceiling
WASHINGTON — With the national debt standing just $25 million below its limit, the Treasury Department warned Congress on Monday that it would run out of room to juggle the government’s books by May 28 unless the government passed an increase in the debt limit by that time — an action caught up in the battle over President Bush’s tax cuts.
Treasury Secretary John Snow said in a letter to congressional leaders that Monday’s orders to temporarily halt investments to various trust funds would allow the government to meet its payment obligations only until May 28.
“The Treasury has now taken all prudent and legal steps to avoid reaching the statutory debt limit, including reducing the size of our regular bill auctions and drawing down available cash,” Snow said.
“An immediate permanent increase in the debt limit is crucial to preserve the confidence in the U.S. government and to prevent uncertainty that would adversely affect our economic recovery,” he said.

Filed under: Economics, Economy, Fiscal Policy, Policy, Politics