I think unemployment will hit its "natural rate" of around 5% in a year or less, maybe a lot less if GDP growth continues strong. But I wonder for how long the American economy can be decoupled from the economies of the rest of the world, many of which are doing poorly. We can grow a certain amount by selling things to ourselves, but for the long term, our export industries have to be healthy. A rapidly strengthening dollar makes that a dicey proposition, particularly if the Chinese continue to refuse to let the Yuan float.
Do you happen to know whether that 50% number includes people whose pension funds are invested by their employers? Anyone with a pension plan has benefitted from the market rise, although indirectly.
I think Lan is right that small investors generally buy into a market at the top and sell out at the bottom. Because this last recession was so severe I guess--and it's only a guess--that a greater proportion of those individuals was squeezed out of the market when it bottomed in 2008-09 than in most previous recessions since WW II.
And (as I have many times posted) I agree that economic cycles move more or less independently of who the President happens to be or what his economic policies are.
McCain is a funny guy, who flip-flops on issues all the time but rarely, if ever, gets called on it. In this case, I think he's wrong. Presidential elections tend to be decided by the personal appeal of the candidates to voters in the middle. You're always going to have offsetting partisans in the two parties; the winner is the person who wins the middle. And with the exception of Ridhard Nixon, since the election of Eisenhower, the winner has been more likeablle than the loser. (I would say that in the last election, you had two buys running, both of whom were hard for the average person to relate to, Obama because of his aloofness, and Romney because of his wealth and lack of compassion for ordinary Joes and Janes. Tie goes to the incumbent.)
If the GOP runs a likeable candidate in 2016 and the Dems run Hillary, it will be a close race. But who has the GOP got that fits that bill? Christie is an arrogant bully. Ted Cruz has all the warmth of IRS examiner. Rand Paul can't make up his mind how much of his Libertarian beliefs he's willing to sacrifice to get the nomination. I thikn that opens the door to one of the GOP governors or ex-governors like Jeb Bush. On the Democratic side, I think Hillary is a lock. Of course, I thought that 6 years ago and Obama sandbagged her. Butif it isn't Hillary, who is it? The Dems don't have the depth of potential candidates that the Republicans do. Elizabeth Warren is the heart-throb of the Democratic left, but I just don't see her getting the nomination.
I think legalizing the work of the undocumented would be a net plus to the federal budget. We would collect both income tax payments and social security tax payments (including the employer's portion) that we don't currently collect. Under Obama's EO, although they can work without fear of deportation, they're not eligible for welfare or Obamacare. I understand that there are enforcement issues and that some people are going to collect benefits to which they are not entitled. But the increase in tax collections would be substantial: it 's estimated that over 80% of the undocumented working age adults have jobs of some sort. IMO, federal resources would be better spent insuring that undocumented aliens and their employers pay taxes than in scaring employers into refusing to hire them.
The availability of work is what draws people across the border in the first place. I've read studies that conclude that remittances from Mexican citizens living in the USA are the second largest source of foreign currency in Mexico, surpassed only by oil sales. As long as people can come here and get jobs that allow them to send some money home, they will take the risk of crossing the border.
Having said all that, I still don't think that an Executive Order was the right thing to do. Better to hold Congress' feet to the fire and get a law passed than default to an expansion of Presidential authority.
Both Ronald Reagan and George H. W. Bush issued executive orders protecting immigrants illegally in the United States. The situations differed from the current situation in one respect: both Presidents expected Congress to pass laws addressing the issue and, ultimately, Congress did just that. Pappy Bush's executive order was broader, in percentage terms, that Obama's, protecting the equivalent of between 5 and 6 million people in today's world.
But that was the pre-Tea Party GOP, which hadn't yet gone off the rails. Neither the Reagan order nor the Bush order caused much of a ripple because they were part of an ongoing bi-partisan effort at immigration reform, the kind of effort the Senate put forth this past year but which the House refused even to bring to a vote.
Nonetheless, the fact remains that both Republican Presidents took actions extremely similar to the one taken by President Obama. I think this history illustrates a certain truth about American politics, that it's sometimes easier for a President to turn his back on his own party to get something done than for a President to adopt a long-standing position of his own party. Nixon's 180-degree switch on Communist China is the prime example.
BTW, Australia has had a couple of years of near 3% GDP growth coupled with sharply rising unemployment, the negative counterpart of Japan's experience. The Australian experience is another example of why thinking of recessions solely in terms of changes in GDP can be quite misleading: rises or falls in nominal growth may be accompanied by either rises or falls in the unemployment rate.
I'm not saying we should in any way copy Japan only that (as Sumner points out) there are situations in which the traditional definition of a recession as two or more consecutive quarters of negative GDP growth is misleading. In a situation like Japan's, where negative growth is accompanied by falling unemployment, focusing on GDP gives a too-pessimistic picture of the well-being of the population. This struck me as interesting because US demographics are on a similar curve as Japanese demographics and we would look a whole lot like Japan already but for the presence in the country of undocumented immigrants.
Headlines scream that Japan has entered a recession and the Abe government is taking vigorous steps to turn things around. But...the Japanese unemployment rate has been falling for years and is now well below the US unemployment rate. How can that be? This is a question posed by my favorite economist blogger Scott Sumner and his answer is informative. Maybe we should stop thinking of a recession in terms of negative economic growth quarter-to-quarter and start thinking of it in employment terms. In the specific case of Japan, the labor force is shrinking faster than the economy, with the result that unemployment is actually falling even as the economy shrinks. This is relevant to the USA where the retirement of the boomers followed by the baby bust projects a similar phonomenon, i.e., unemployment falling faster than the rate of job growth. Japan illustrates that you can have full employment even during a deflation. We still have moderate inflation and probably won't actually experience Japan-style deflation so long-term the emplloyment situation looks pretty good.
All Presidents have discretion when it comes to deciding which crimes and/or criminals to prosecute. Obama's case for declining to prosecute a specific sub-set of the country's undocumented aliens is legally pretty solid, at least as solid as Bush's infamous "signing statements" which, in some instances, amounted to outright nullification of Congressional intent.
As I have argued elsewhere on this board, notwithstanding that he has the legal authroity to do what he's doing, I don't think he should bring about immigration reform of this magnitude by Presidential decree. There's no emergency that requires this problem be solved asap. In that sense it is different from Lincoln's suspension of habeas corpus in the middle of a war for the survival of the country. Of course he's frustrated that the House refused to consider the bipartisan reform bill that the Senate passed, but isn't that the way it's supposed to work? The House is an independent legislative body deliberately different from the Senate and entitled to form its own opinoin on proposed legislation.
No. There's a difference between prioritizing cases for prosecution (go after the drug dealers instead of the drug users, for instance) and refusing to obey a law. But...it's a slippery slope. As I said in my post, why stop at shielding 5 million from deportation? why not go for 10 or 12 million? Or why not decide not to prosecute tax fraud? or perjury? or treason There is a point where discretion shades into defiance. I don't think the President is there, but he's walking a thin line.
Politically, it doesn't matter. The impeachment standard, "high crimes and misdemeanors" is so vague and elastic that Congress can impeach the President for almost any reason or for no reason at all. I don't think the House will do that over the immigration order, but it might.
In a word: Yes.
Should he exercise that authority?
In a word: No.
The President and his lawyers are correct to argue that prosecutorial discretion allows him to pick and choose which cases to litigate. Prosecutors do it all the time, at every level of government, and the President, as the de facto head of law enforcement in the country, can make that call if he wants to.
But, in my opinion, he should not do it. (Not that he's listening to me!)
First of all, the scope of the proosed order is vast covering perhaps as many #$%$ million people. And, one might ask, why stop there? Why not cover every undocumented alien, all 10-12 million of them? A change this large in the legal order should be accomplished by legislation; that's what Congress is for.
Second, going around Congress, especially as a lame duck, transfers enormous power to the Presidency that the Constitution clearly intended to be exercised by the legislature. Such a shift in power will likely be permanent as the next President, Democrat OR Republican, finds it convenient to ignore Congress even more. Just as Bush's expansion of the Presidency was seized on by Obama, so too will Obama's expansion be seized on by his successor. All future Presidents will inherit a much enhanced office and will be tempted even more than they are now, to ignore Congress and govern by fiat.
Third, this action undercuts the rationale the President has used to protect children brought into the country ilegally, who had no choice in the matter, from people who deliberately chose to enter illegally. There should be different consequences for those acted and those who were acted upon.
Fourth, this action will encourate a new flood of illegal entries as people reasons that if they can somehow get here, they can stay here.
We need immigration reform. Bu this is not the way to do it.
I don't know where you get the idea that climate change will manifest itself most in the mid-latitudes. The most striking examples of wamring are from the southern polar regions. And your post is a red herring. Either you look at global average temperatures or you are cherry picking. There are anomalies in every local temperature series but the global trend couldn't be clearer. The globe is getting dignificantly hotter and the increase is concentrated in the most recent years.
I have enormous respect for you, as you know, but you have a blind spot where this topic is concerned.
The year 1934 WAS a very hot year IN THE UNITED STATES, ranking fourth behind 2012, 2006, and 1998. However, global warming takes into account temperatures over the entire planet. The U.S.'s land area accounts for only 2% of the earth's total surface area. Despite the U.S. heat in 1934, the year was not so hot over the rest of the planet, and is barely holding onto a place in the hottest 50 years in the global rankings (today it ranks 49th).
Climate change skeptics like to point to 1934 in the U.S. as proof that recent hot years are not unusual. However, this is another example of "cherry-picking" a single fact that supports a claim, while ignoring the rest of the data. GLOBALLY, the ten hottest years on record have all occurred since 1998, with 2005 and 2010 as the hottest.
The National Climate Data Center (part of NOAA) maintains global average temperature records dating back to 1880. While the change in global average temperature is not strictly linear--i.e. a warm year may be followed by a slightly cooler year--the trend is unmistakable. The 10 warmest years on record out of the past 134 are 2010,2005, 1998,2013,2003,2002,2006,2009,2007, and 2004. 2014 is not over yet, but it may be the warmest of all. September 2014 is the warmest September in the past 134 years.
You can cherry pick this data point or that one to argue that global warming isn't happening but there simply is no doubt that it is. And one feature of the warming globe is an increase in all types of severe weather including the recent freak snowstorms in the northeast. Heat is energy. The atmosphere has increasing amounts of energy in it and that translates into stronger and more frequent severe weather events.
A sizable majority of the public oppose amnesty, at least according to the polls, and that includes almost the entire GOP base and many independent voters. Democrats are split on this issue and are also uneasy about the expansion of Presidential power that the proposed executive order represents. Even if Obama has the narrow legal right to direct the Justice Department to cease prosecuting people for deportation, the scale of his order, affecting perhaps 5 million people, would be unprecedented. My personal veiw is that bringing these people out of the gray market into taxpaying regular jobs would be a good thing but I don't think a Presidential directive is the way to do it. It should be the result of legislation and if the Republican controlled Congress isn't prepared to act on immigration reform, well, that's democracy for you.
1. We have had de facto amnesty for the past 50 years or more. We tolerate the presence of undocumented alens as long as (a) we don't catch them at the border fand (b) they don't commit crimes.
2. The undocumented are mostly employed. Among adults, 80-85% have jobs of some sort, waiters, housekeepers, construction workers, gardeners, babysitters, farmworkers, non-union factory workers, etc. Gray market jobs mostly, and frequently jobs citizens don't want or won't take.
3. Illegal immigration keeps us from becoming Japan. Birth rates among citizens are below replacement level.
4. Legalization is inevitable. Hispanics are the largest and fastest-growing segment of the American population. Sooner or later, sheer numbers will force us to create easier pathways to citizenship.
5. Immigrants (legal or illegal) are not necessarily going to vote for Democrats. See Cubans in Florida, for example. As the Hispanic population grows, Republicans are going to compete for their votes and, in many cases, they will get them. Hispanic voters in Texas voted in large numbers for Bush when he was Governor, for instance.
However, in spite of 1-5,
6. If President Obama signs an executive order converting our de facto toerance into de jure tolerance, it will be great news for the GOP and terrible news for Hllary Clinton.
What did you expect welfare caseloads to do in the aftermath of the worst recession since the 1930's? That reciession begain in 2008 and for many people, it still hasn#$%$ ended, as you have repeatedly pointed out. The recession hit harder here and has lasted longer here than in many other places, and that fact is reflected in the welfare caseloads and other statistics you cite. But you can#$%$ blame any individual state for the recession or for the slow recovery. California will catch up, its welfare case load will decline, and it will continue to be the nation's center for high tech innovation. (Unless the drought, driven by the climate change that you don#$%$ thiknk is happening,makes the state unlivable#$%$
I have limited (well, OK VERY limited) sympathy for those who argue that the case for human caused climate change isn't 100% certain. Real scientific skeptics are immensely valuable people because they insist on rigorous standards of proof. And there may be a handful of them still around. But I am flat-out astounded by people who claim that climate change isn't happening because, at the moment, it's snowing where they live, or some such thing.
Even if you think the case for human causation is not air-tight, why wouldn't you be concerned about the consequences of the changes taking place all over the world? And why wouldn't you be looking for ways to prevent or mitigate what will otherwise be a world-wide disaster? Roughly 2-3 billion people in Asia depend on the rivers flowing out of the Himalayas, for example, which are fed by the Himalayan glaciers. All of them are at risk as those glaciers recede and their water supply diminishes. I live in California where we are in our 5th year of a drought that threatens the agricultural heartland of the state, where a huge percentage of the fruits and vegetables of the whole country are grown. Parts of the state already have conditions worse than they had in the '30s.
To deliberately blind yourself to these things is a form of intellectual suicide.