Estimates of growth in the economy for the first quarter of 2013 were 2.5%. Now, with a little more distance, that number has been revised down, to 2.4%. Not bad—it’s the fastest rate in two years, most of it driven by an unexpected boost in consumer spending (which in itself is surprising, and good news, because consumer spending is a powerful economic engine). But also this week, the number of jobless claims went up more than expected (and this number varies week to week—one week’s stats don’t tell much of a story, only longer-term trendlines do).
What does it all mean? It means that while we’re still in recovery mode, that recovery is being hampered. And what’s doing the hampering? Sadly, artificial roadblocks built by elected members of Congress—mostly Republicans, a handful of Democrats—and far too often, the president, who has shifted his argument from the need for stimulus to the making the case that deficit reduction is working. It is, but that’s not what’s needed.
The conservative fixation on spending cuts is doing real, significant damage to real American lives. Balanced budgets are fine when the economy is strong—indeed, a strong economy can lead to a balanced budget. But trying to balance the budget when the economy is climbing out of a hole is dangerous. As reported by CNBC this week, “Government belt-tightening started five years ago as a sharp drop in both property and income taxes forced state and local government to slash budgets, pare services and lay off workers. A massive federal stimulus package helped blunt some of the pain, but those funds have largely dried up.
“Now, as state budgets are stabilizing, an $85 billion federal budget-balancing package of tax hikes and spending cuts is taking another bite out of gross domestic product.
“‘The ongoing fiscal contraction is now the biggest obstacle holding back the recovery,’ said economists at Capital Economics in a note to clients this week.”
As economic concepts go, this one isn’t all that complicated. When state and local governments aren’t spending and businesses aren’t spending and consumers aren’t spending, but the federal government can borrow money at zero-percent interest or better, the federal government should spend. Austerity measures at a time like that are an invitation to disaster (not just here at home, but also in Europe). The stimulus package of 2009 turned around the economic plummet of doom, but when those funds dried up, recovery slowed. Now consumers are feeling better about the value of their homes and their 401Ks, and they’re starting to spend (even though most households have not rebuilt all the wealth they lost in the recession, and the richest 20% of the population score more than half the savings from tax breaks). But we’re not all the way out of the hole, and cutting federal spending, focusing on deficit reduction, is the wrong approach.
Sadly, as long as Republicans in Congress keep blocking real stimulus measures and stressing deficit reduction (while refusing to accept the fact that we really have already reduced it significantly), the recovery will continue to chug along in fits and starts, and real Americans will suffer needlessly (not just financially--in fact, a new book argues that austerity policies actually have a detrimental impact on public health).
(Side note: Representative and former VP candidate Paul Ryan gave an interview this week, in which he admitted that Congressional Republicans won’t negotiate a budget unless they can hold the U.S. economy hostage. This is why we can’t have nice things.)
This Week in Bipartisanship
President Obama has selected James Comey, a Republican and one of the highest-ranking officials in the Bush/Cheney DOJ, to replace Robert Mueller as head of the FBI. This should come as no surprise to those who accuse the president of rabid partisanship, though it probably will. His appointments have included Republican Bush/Cheney Secretary of Defense Robert Gates and then new SecDef, former Republican Senator Chuck Hagel; former Republican Representative John McHugh as Secretary of the Army; former Republicans Representatives Ray LaHood as Secretary of Transportation, Jim Leach as head of the National Endowment for the Humanities, and, just this week, Anne Northrup as head of the Consumer Product Safety Commission; and former Republican Governor Jon Huntsman as Ambassador to China. He nominated former Republican Sen. Judd Gregg to be his Commerce Secretary, but Gregg dropped out.
For a rabid partisan, that guy sure surrounds himself with a lot of Republicans. By contrast, George W. Bush’s cabinet included Norman Mineta, who had once been my mayor in San Jose, as his Secretary of Transportation, and... oh, sorry, that’s the only Democrat who served in his cabinet over two terms. Bill Clinton had one Republican in his. George H.W. Bush had no Democrats in his cabinet, and Ronald Reagan had only one Democrat, who switched parties the year after his appointment. There has literally never in American history been a president who has had as many people from the opposition party in his cabinet.
For the record, James Comey is one hell of a lawman, who has demonstrated great courage and integrity throughout his career. He’s an inspired choice to run the FBI. But he’s going to have a terrible task ahead of him, trying to clean this up.
This Week in Random Geekness
The largest-ever Lego model is an X-Wing fighter. And it’s giant.
Where do all our greenhouses gases come from (in one giant chart)?
And have we found Amelia Earhart’s plane?
This Week in Poverty
What’s the easiest way to fight poverty and increase hours worked and labor productivity, all at the same time? Turns out, it might be to give the poor money, with no strings attached.
This Week in Transparency
Bill Moyers is a national treasure. The American Legislative Exchange Council (ALEC), however, is a national disgrace, a secretive but very influential group that exists primarily to push taxpayer money into corporate coffers. By bringing the profit motive into public life—privatizing schools and prisons, for example—they’re making taxpayers pay more for less. It’s a raw deal for we the people, and our only defenses are knowledge and the vote. Let’s use both.
This Week in Disney Safety
Not only did we have a dry ice bomb explode in Disneyland’s Toontown (which fortunately did not release the feared floods of Dip), but a gentleman with a concealed carry permit took his loaded handgun into Disney World—which prohibits weapons of any kind—and then left it on his seat at the Animal Kingdom’s Dinosaur Ride. A grandmother riding with her grandson found it when she got on. If it had been the Small World ride, that might be acceptable, because who doesn’t want to shoot those singing puppets?
In more tragic gun news, this week a 2-year-old boy died after shooting himself in the face in a home that Child Protective Services had deemed unfit for children; a gun went off in a third grader’s backpack outside his school; and the 29 people shot in Chicago over Memorial Day weekend—6 of them fatally—was, horrifically, an improvement over last year.
This Week in Professionalism
Our collective hats are off to the meteorologists at NOAA, and the on-the-ground meteorologists at KFOR and other media outlets in Oklahoma, who are warning the population, street by street, block by block, where the tornadoes are headed and how to be safe. We are also impressed by Oklahoma’s emergency workers, and the regular folk who have to rebuild their lives after massive storms pass through.
This Week in Bears
Boo Boo Bear returns to the wild. Safe travels, Boo Boo. Say hi to Yogi for us.
This Week in RIP
Authors Andrew Greeley, 85, and Jack Vance, 96. Thanks for all the stories, gentlemen. And Al Fritz, who invented the Schwinn Sting-Ray bike. I had one in my early teens, which I fished out of a lake but in almost perfect condition. Rode it for years.
Quotes of the Week
"I had come to realize the importance of the Nation, and of shared, communal, social responsibility, to be held as equally important as individual concerns. The elderly, the widowed, newly married couples, the poor, the unemployed, disbanded soldiers and children, who would be required to attend school, must be provided for from state funds. And all this support is not the nature of charity, but of a right."
--Thomas Paine, 1792.
"You gentlemen represent what is to my mind the highest calling in life. The public must come to you for its reading matter, and I am willing to share the responsibility with you. Publishers are a necessary evil, but by hearty co-operation between you and me I believe we can give the publisher an awful run for his money."
--Author Irvin S. Cobb, speaking to booksellers at the American Bookseller’s Association convention in 1913. That convention, now called BookExpo America, or BEA, is taking place this week in New York.
Here’s Mysterious Galaxy partner Terry Gilman and my old colleague and friend Michael Tucker from Books Inc. speaking at one of the education panels there.