04/19/2018

News

Government Spending: It’s Children vs. Grandparents

To those paying attention, the recent strikes for higher teachers’ pay in West Virginia and Oklahoma are a harbinger of things to come. You can attribute the strikes to the stinginess of the states’ political leaders. After all, average annual teachers’ salaries in these states ranked respectively 49th lowest (Oklahoma at $45,276) and 48th lowest […]

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I Totally Get California, But the Golden State’s Nightmare Confuses Me

Each year, I author the “Small Business Policy Index” for the Small Business & Entrepreneurship Council. The index ranks the states according to assorted policy and policy-related indicators, including taxes, regulations, government spending and debt, as well as a few measures of governmental performance. But make no mistake, the big governmental burdens for entrepreneurs and […]

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So Long As There Are Wants and Needs, There Will Be Jobs

With the growth of artificial intelligence (AI), many are worried that we may all be put out of work, replaced by robots. We can stop worrying. We’ll run out of jobs when we run out of goods and services we desire. Which will be never.

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Kevin Hassett Smacks Down the Partisan Tax Policy Center

Backing up Hassett’s assertions, former CEA chair Glenn Hubbard recently wrote in the Wall Street Journal that too many economists fail to consider the share of the U.S. corporate tax burden borne by labor — 60 percent according to his research. Neither the TPC, the CBO, nor the JTC (Joint Tax Committee) model these results. Instead, they ignore the evidence.

A recent analysis of the House tax plan — which is nearly identical to the Trump plan — by professors Alan Auerbach (Berkeley) and Laurence Kotlikoff (Boston University) concluded that it would boost wages by 8 percent. That’s a big number.

It’s the difference between a prospering and optimistic middle class and a pessimistic middle class that lives day-to-day, paycheck-to-paycheck.

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America’s Middle Class Is Back…Or So It Seems

The middle class is back — or so it seems.

That’s the message from the Census Bureau’s latest report on “Income and Poverty in the United States.” The news is mostly good. The income of the median household (the one exactly in the middle) rose to a record $59,039; the two-year increase was a strong 8.5 percent. Meanwhile, 2.5 million fewer Americans were living beneath the government’s poverty line ($24,563 for a family of four). The poverty rate fell from 13.5 percent of the population in 2015 to 12.7 percent in 2016.. . . Not all the evidence is upbeat. Here are three sobering takeaways.

First, men’s median wages for full-time, year-round work have stagnated.

. . . Second, the upper middle class is flourishing — but not the lower classes.

. . . Third, almost three-quarters of the rise of Americans living in poverty since 1990 reflects increases in Hispanic poverty — increases linked to immigration, whether legal or illegal.

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Does the U.S. Have a Labor Shortage? Maybe

For months, I’ve planned to write a column on the future of the U.S. labor market. Stacked on my desk are reports on “the gig economy,” “independent workers,” “contingent workers,” “freelancers” and the like. All signify a new, less secure labor market. Workers won’t have long-lasting career jobs, as the old post-World War II employment model promised. Now it’s survival of the fittest. Workers who can adapt to constant change will thrive. As for everyone else, tough luck. I never wrote that column. The main reason is that I never felt certain that this widely prophesied labor market would prevail. Indeed, the postwar employment model might make a comeback. Demographics — the ongoing retirement of the massive baby-boom generation — would make experienced and competent workers prized resources. Because the labor force would be growing only slowly, many companies would try to stabilize their employment by offering career jobs with better wages and benefits. I still don’t know which of these models will triumph: the first reflecting a management belief that workers must be hired and fired as business conditions dictate; the second based on the notion that good workers will be scarce for the foreseeable future and smart companies will do their best to train and retain them.

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Trump Budget Is a Revival of the Clinton/Gingrich Growth Model

When OMB director Mick Mulvaney unveiled the new Trump budget, he used language that is so important — although we haven’t heard it in so many years. To paraphrase Mulvaney, the measure of budget success for the Trump administration is not how much federal assistance is given out, but how many people leave government dependency and join the private labor force as full-fledged workers.

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Are American Living Standards Truly Stagnant?

It may turn out that the widespread belief that most Americans’ incomes have stagnated for years is, well, false or at least overstated. . . In a provocative new study, economist Bruce Sacerdote of Dartmouth College reviewed the material well-being of the poorest 50% and 25% of Americans. What he concluded was that even these families had achieved a “meaningful growth in consumption … (despite) a prolonged period of increasing income inequality … and a decreasing share of national income accruing to labor.”

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Expensive Housing Imperils the California Dream

The unaffordability problem affecting the Bay Area-Silicon Valley region of California is a serious statewide crisis that Sacramento isn’t taking seriously.  But this problem isn’t the Bay Area’s alone.  California’s most populous region – Greater Los Angeles – is also plagued with unaffordable homes and rentals. And March 2017’s consolidated Los Angeles election has housing affordability front and center.

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Jerry Brown’s Shocking 2017-2018 Budget Proposal

But Brown’s fiscal restraint posturing is more talk than action. His first enacted budget since re-election in 2010 totaled $128.3 billion (June 2016 dollars) in General and Special Fund expenditures. By 2016-2017, the budget had ballooned 30 percent to $167.1 billion. Overall, Brown has increased real General and Special Fund spending by an average of 5 percent per year.

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Debunking the Fossil-Fuel Subsidy Myth

The federal government subsidizes the fossil-fuel industry to the tune of about $3 to $5 billion dollars per year (the exact amount depends on whose numbers you believe). . . According to the apolitical U.S. Energy Information Agency, the federal government spends about $3.5 billion per year subsidizing the coal, petroleum and natural gas industries. By contrast, the Feds dole out about $15 billion every year in subsidies to the renewable energy industry (mainly to support new wind and solar projects) and $20 billion per year for agricultural subsidies and insurance.

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How Health Care Creates Wage Inequality

It’s simple arithmetic, writes Mark Warshawsky of the Mercatus Center at George Mason University, author of the study. Paying for expensive health insurance squeezes what’s left for wage and salary raises. Economic inequality increases, because health insurance typically represents a larger share of total compensation for lower-paid than higher-paid workers. Their wages are squeezed the most.

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Today’s Tax Code Is Failing the American People

The USA Today editors hit the nail on the head in their assessment that, “The best way to deal with inversions and other tax-avoidance games is to cut the high corporate tax rates that are prompting corporate leaders to seek relief in gimmicks. Like so much else in Washington, however, efforts to fix corporate taxes are going nowhere fast. Congress is loath to take on a tough issue. And the Obama administration continues to push Band-Aid efforts.”

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Manufacturers to Congress: Advance a Pro-Growth Agenda

Close to 500 company leaders-from family-owned small businesses to world-recognized brands-are on Capitol Hill as part of the NAM’s 2016 Manufacturing Summit. We are making one request of policymakers: Unleash our power to compete and win globally, with a focus on three key legislative issues: the Trans-Pacific Partnership (TPP), a fully functioning Export-Import (Ex-Im) Bank Board and comprehensive business tax reform.

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Robert Samuelson: Have U.S. Wages Stagnated? Probably Not

A new study from the Federal Reserve Bank of San Francisco . . . concludes that widely cited figures showing stagnation are mostly a statistical fluke. Workers continuously employed in full-time jobs received wage increases higher than inflation from 2002 to 2015. Last year, the gain was a 3.5 percent increase after inflation, up from 1.2 percent in 2010.

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