Tag Archives: economy

Tea Party bait in the NYT: “You are white, Republican, and racist. Oh, and theocratic, too.”

I’ll admit it: just the fact that the story is coming  from the New York Times gives me pause.

But there it is: “Crashing the Tea Party,” by David E. Campbell and Robert D. Putnam, a couple of professors who think they have profiled Tea Party members based on some wide ranging research.

The results are provocative and, if they are in any way correct, indicate that Tea Party members are less naïve about politics than previously thought, tend to hold a low regard for immigrants, and very religious, even wanting leaders who mix religion and politics ….which explains why Michelle Bachman and Rick Perry are getting good reviews from the Tea Party.

Oh, also they are more likely to be Republican.

Whatever the characteristics, Campbell and Putnam suggest that it has contributed to giving the Tea Party a lower  approval among the public than atheists and Muslims. Ouch.

...because blondes have more fun.

But wait! There’s more: the Tea Party is not necessarily a creature of the recession. Tea Party members tend to have already been (as well as being white) very conservative and active Republicans.

Many Americans have suffered in the last four years, but they are no more likely than anyone else to support the Tea Party. And while the public image of the Tea Party focuses on a desire to shrink government, concern over big government is hardly the only or even the most important predictor of Tea Party support among voters.

[…]

More important, they were disproportionately social conservatives in 2006 — opposing abortion, for example — and still are today. Next to being a Republican, the strongest predictor of being a Tea Party supporter today was a desire, back in 2006, to see religion play a prominent role in politics. And Tea Partiers continue to hold these views: they seek “deeply religious” elected officials, approve of religious leaders’ engaging in politics and want religion brought into political debates. The Tea Party’s generals may say their overriding concern is a smaller government, but not their rank and file, who are more concerned about putting God in government.

Hmm…so how about that ‘separation between church and state’ thing? The Tea Party does know that it was one of their darlings, Mr. Thomas Jefferson himself,  that was one of the first to actually phrase it that way, right?

I don’t know about you, Reader, but the last thing I think we need is a litmus test for an elected official the measures religiosity. I would rather an atheist that upholds the law and defends the practice of religion over a deeply religious nut job  person who discriminates in favor of his or her faith. Of course, if we could find a deeply religious person who upholds the law (and doesn’t err on the side of larger government), then I probably wouldn’t mind. But then, it has nothing to do with religiosity, and we’re back at my main point: religion is the wrong litmus test for a leader.

Gov. Rick Perry (R-Texas) led 30,000 Christians in prayer Saturday -- at an event that may boost his fortunes with the GOP's critical bloc of evangelical voters. Photo: Brandon Thibodeaux/Getty Images

And yet, Campbell and Putnam suggest that this very litmus test is the likely reason for Michelle Bachmann and Rick Perry’s success in recent weeks with the Tea Party.

And what about the libertarians that are finding common cause with the Tea Party? I don’t see them reflected in the research discussion or results. In my experience, libertarians are just about growing on Republican trees these days, but they would be the last people to support increased religion in politics.

Which leads me to Campbell and Putnam’s method. The two professors (Campbell is an associate professor of political science at Notre Dame and Putnam is a professor of public policy at Harvard) interviewed 3,000 people in 2006 as part of continuing research into national political attitudes. They returned to the same people this year. They explain that

[a]s a result, we can look at what people told us, long before there was a Tea Party, to predict who would become a Tea Party supporter five years later. We can also account for multiple influences simultaneously — isolating the impact of one factor while holding others constant.

Perhaps. I’d like to take a closer look at the results to find out what kind of questions were asked, how the people were selected, and what the margins of error were.

In any case…

Even as a Republican, and a long time Republican at that, it would be disingenuous for me to dismiss these findings out of hand. While I don’t find them to be definitive, I do find the results descriptive.  Utah’s Tea Party may be distinct  in some respects due to some characteristics that are uniquely local, but in many respects the results seem to apply here.

On the other hand, could this just be Tea Party bait by New York Times liberals?

Religious litmus test or not, elections are not about rationality, but winning, and if it takes that to win, could we expect anyone but a deeply religious person to win the race for the Republican nomination?

Read the full article at “Crashing the Tea Party” in the New York Times.

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Does government spending have a multiplier effect on the economy?

If I didn’t lose you with that wonk-ish sounding title, there’s a good possibility I’ll lose you a little later, so let me summarize: new research suggests that government spending doesn’t actually help the economy all that much.

Bear with me as I explain.  Some economists of the Keynesian persuasion believe that in a recession the economy is really facing a demand and supply problem, and that the way to get a depressed economy going again is to increase the demand for products and services. Accordingly, governments should enact policies that increase demand, which would in turn provide increased employment to meet that demand. To do that, governments should spend money, on roads, on dams, even, according to theory, on digging holes. That worker will then go out and spend that money, providing further cash to businesses that will hire more workers, spend the money on wages, and so on.

Spending to recovery, is how it has been called. The money that the government inputs to the economy is said to have a “multiplier” effect, because as it is circulated its effect is multiplied. Conventional wisdom, then, is that the more money the government gets spent, the more it does to boost the economy…which is why we’ve seen so much “stimulus” talk in recent years. The money is supposed to stimulate the economy.

But what if the conventional wisdom was wrong? What if there is little, or no, multiplier effect? (and here is where I think I might lose you, again):

Research published in November of 2010 is indicating that there is very little multiplier effect. From the abstract of “In Search of the Multiplier for Federal Spending in the States During the New Deal,” by authors Price V. Fishback and Valentina Kachanovskaya:

If there was any time to expect a large peace-time multiplier effect from federal spending in the states, it would have been during the period from 1930 through 1940 when unemployment rates never fell below 10 percent and there was ample idle capacity. We develop an annual panel data set for the 48 continental states from 1930 through 1940 with evidence on federal government grants, loans, and tax collections and a variety of measures of economic activity. Using panel data methods we estimate a multiplier, defined as the change in per capita economic activity in response to an additional dollar per capita of federal funds. For personal income, which includes transfer payments as income, the estimate ranges from 0.91 for the combination of government grants and loans to 1.39 when only grants are considered. It is important to distinguish between the effects of farm subsidies and the combination of public works and relief grants. The personal income multiplier for public works and relief was around 1.67, while the effect of farm payments to take land out of production reduced personal income by 0.57. Multipliers for a more production-based measure of state income per capita after removing nonwork relief transfers and adding back payroll taxes are about 10 to 15 percent smaller. The multiplier for wages and salaries was substantially less than one, as was the multiplier for retail sales. The impact of the federal spending on employment was negligible and may have been negative. The results may help explain why measures of income have recovered more rapidly than measures of employment in both the 1930s and in the current era.

Get it? When the multiplier is “substantially less than one,” then the federal spending is not having much effect on the economy. Literally, there is not much “bang for the buck.”

Will Dems or GOPers “get the message” from last Tuesday?

the 44th President of the United States...Bara...
Image by jmtimages via Flickr

Some guy over at Popehat doesn’t think they will:

Chance of the Republicans “Getting It” About Small Non-Economic-Sector Government: Thumbs Down.There is no good indication that Republicans, whether traditional or Tea Party, grasp — or care — that military adventurism, the post-9/11 Security State, the War on Drugs, or government enforcement of conservative social agendas all tend to grow government power and cost lots of money. […]

Chance of Democrats “Getting It”: Don’t make me laugh.

and that’s the real rub of it, isn’t it? Last Tuesday was an election, and that election was a referendum on how our country has been run for the last decade, not just the last two years. As Steve Kroft of 60 Minutes put it last night: “Republicans say the voters sent […]a very clear message on Tuesday. That they want a smaller, less costly, more accountable government.”  People may be pointing their fingers at Obama and Pelosi right now, but a lot of them were doing the same at Bush just a couple years ago when the voted Obama into office in the first place. That they’ve now flipped a voted the other direction is just a way of saying “You didn’t get the message in the first place, and so we’re sending it again.”

Maybe it’s the pessimist in me, but I’m not yet sanguine enough about the election results delivering the change that Americans want. It was just two years ago that they voted on just that theme, and already they’re turning on the party they put in power. Nor am I of the opinion, as Vanity Fair editor Graydon Cartor recently opined,  that Americans are just like “hormonal teenagers,” “seems prone to acting out irrationally, is full of inchoate rage, and is constantly throwing fits and tantrums[.]” He undersells and insults common Americans’ intelligence, all while delivering a pass to the power of the ruling party. We are a republic, the American republic, and it is the right, and responsibility, of the voting public to pass judgement on the policies passed by those whom we elect. Americans went to the polls on Tuesday last, they looked at their representatives, and they held them responsible (except in California, but then, California walks to the beat of a different drum, anyway).

So why am I not optimistic? It’s probably just my nature. But also, I’ve begun to develop a “wait and see” attitude about the promises of any politician, especially those made on the campaign trail. Heck, President Obama as much as admitted on Sixty Minutes last night that campaign rhetoric is suspect, including his own. It’s just too easy to say what voters want to hear:

[Y]ou know, when you’re campaigning, I think you’re liberated to say things without thinking about, “Okay, how am I gonna actually practically implement this.”

And then they get to Washington, and they have to govern. Can they govern on what they have said? Can Republicans do what they promised to do without falling prey to the same hubris they have been campaigning about? Can they avoid the temptation to expand the size and growth of government?

As we think about that, and even the question of whether such is actually a problem, I think it’s interesting to note what President Obama said in response to Steve Kroft when asked if he, President Obama, had got the message that voters wanted smaller, less costly, and more accountable government:

I think that, first and foremost, they want jobs and economic growth in this country. They want to feel that the next generation is gonna be able to benefit from the American dream the way previous generations have. That our kids and our grandkids are gonna have a better life than ours, not one that’s diminished. That’s the most important thing that people are looking for.

I also do think that the American people are concerned that the debt and deficits that have been built up over decades — and they got worse as a consequence of this economic recession — are things that have to be fixed. And we’ve gotta fix them so that the next generation doesn’t have to fix ’em.

That sounds an awful lot like “It’s the economy, stupid.” And in many respects, I agree with him. It is the economy. The problem and the disconnect for President Obama and why the wave last Tuesday? Many in this country do not believe that the economy will return to prosperity and growth by continueing the policies and programs that have been the hallmark of the last two years, or even the last decade.

It is the economy. But it is not the government that can save us.

In-house making gains over outside counsel

In news that’s good for me, ensconced in my Dilbert-land cubicle in the legal department of corporate America, general counsels are reporting that the costs of litigation balanced against tough economic times is pushing them to expand their in-house legal departments at the expense of outside counsel.

From the ABA Journal:

Given the higher regulatory risks (and the velocity of those risks, thanks to the Internet), companies can’t afford to react to crises in reasoned, drawn-out time frames, said Janet G. Kelley, senior vice president and general counsel of Meijer Inc. Kelley was among those participating in a discussion last week that was part of Foley’s National Directors Institute Web Conference Series.

The article goes on to say that corporations are finding that when a legal question arises, it’s easier, faster, and cheaper, to have informed legal counsel already at the table, rather than wait for a well drafted memo on the issue from outside help.  When a reputation is on the line, companies don’t always have time to wait.

“Executive committees realize the value of having a GC at the table and the value of being able to protect a company’s interests early on,” said Deborah Dorman-Rodriguez, senior vice president and chief legal officer of Health Care Service Corp. She added that getting a legal perspective early on saves money.

The strengthening of in-house counsel is not just due to efficiency, either.  Cost plays a large part in the equation, as well.

The pressure to reduce costs has also pushed general counsel to become more assertive when voicing billing and staffing concerns to their outside lawyers.

“The hourly rate may be an outdated approach for us and not sustainable,” said Dorman-Rodriguez, who cut HCSC’s outside counsel from 120 to 25 firms more than a year ago. “We’re also actively engaged on how legal matters are staffed, and if one is a little too top-heavy, we’ll say we have a problem with the budget.”

Whether or not the changes are here to stay is up for debate.  I suspect, though, that a decrease in legal costs and an increase in access to legal counsel will always be valued, regardless of the state of the economy.  When the economy does start to turn, I can foresee the increases in in-house legal departments remaining.