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Reconciliation

Recap: My working understanding of the Republican economic agenda; double-counting in health care defined; and something you should really read.

Elsewhere:

1) Foreign-born doctors are as good as native-born doctors.

2) Twenty years of the American Prospect.

3) Democrats base their jobs strategy around manufacturing.

4) I'll be on Rachel Maddow's show at the top of the hour tonight.

By Ezra Klein  |  August 3, 2010; 6:30 PM ET
 
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Next: Wonkbook: Dems look to Collins; energy bill delayed; drilling ban may end early; Kagan to be confirmed tomorrow.

Comments

"Some independent analysts are also skeptical. U.S. manufacturing jobs have been disappearing since 1979, in part because of the heightened productivity of American workers but also because of cheaper labor abroad. Over the past decade, the sector lost a third of its workers, falling from 17.3 million people in 1999 to 11.7 million last year, according to the most recent figures from the Bureau of Labor Statistics."

#3 shows the failure of industrial policy. This is like basing your jobs strategy around creating farming jobs in 1940. It just isn't going to work. The journalists who wrote the article were even aware of productivity growth is what makes these jobs obsolete. As much as Steny Hoyer might wish, these jobs aren't coming back. Sure, we might get a few new manufacturing jobs over the next year or two, but the long-term trend is down down down!

What the article doesn't mention is that industrial output in 2010 is the same as 2009 - yet we needed only ~67% of the workers to get that output.

Also, look at the surge in industrial
production from 1990 to 2000. Huge, isn't it? Then go to the BLS and look at the number of manufacturing workers employed in 1990 and 2000. 17.8 million in January of 1990, and 17.3 million in January 2000. Even in a decade where production increased by about 50%, we still lost 500,000 manufacturing jobs.

http://research.stlouisfed.org/fred2/series/INDPRO?cid=3

Even China - an economy with demand soaring for all things industrial - can't consistently grow manufacturing jobs. They lost 10 million manufacturing jobs from 1996 to 2006 (about 8%), despite 10-20% annual increases in production. While they had a growth phase from 2002-2006, China almost certainly lost a ton of manufaturing jobs in 2008-2009.

http://www.manufacturingnews.com/news/09/0529/chinesewages.html

Posted by: justin84 | August 3, 2010 7:23 PM | Report abuse

I need to vent about something:

Did anyone read Tim Geithner's op-ed in the New York Times today? I don't understand why the Administration insists on making the argument that we are on the rebound at the very moment that many indicators show that the economy is either stagnating or is possibly even declining. There is a strong probability that the job report this Friday will be bad, much like reports released today. How can the Administration's message of "recovery" be reconciled with peoples' observations and common sense that it isn't? This is exactly what they did last summer. The President told us that things were getting better as unemployment continued to rise. It made no sense.

Contrast this with the President's recent weekly address in which he faulted Republicans for blocking additional help for the economy. This was, at least, a tacit recognition that we need to do more. Needing to do more for the economy would resonate with people. It would also be problematic for Republicans, because they don't really want to do anything. I'm no communications professional but how can they say, on the one hand that the GOP is blocking needed economic reform, and on the other, say we're on the right track.
Even if I don't like the Republicans, Tim Geithner's op-ed almost tells people who don't like the state of the economy to vote GOP.

Why hasn't the White House proposed using the expired tax cuts for rich people to fund investments in infrastructure and education in order to build the economy of the future that we need? At a minimum they could propose using the expired tax cuts as a defecit reduction measure. I don't even think they've tried to connect the exiration of the tax cuts to economic policy.

Why aren't the White House, and Congressional Democrats faulting Republicans for cutting back the Recovery Act? Why aren't they saying what they want to do for the economy instead of pretending like we're on the rebound? No one, except the White House, thinks things are getting better.

I continue to hope this is part of some brilliant plan, but doubt is becoming overwhelming.

That is all.

Posted by: phillycomment | August 3, 2010 8:28 PM | Report abuse

Actually, that's not all. One addendum to the above comment.
You know what the "recovery" message from the Obama Administration sounds like?

Answer: "The fundamentals of our economy are strong." -John McCain, defending a collapsing economy just a few months before an election.

Posted by: phillycomment | August 3, 2010 8:40 PM | Report abuse

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