Job Report Caveats

Justin Fox doles them out:

These numbers are subject to revision. Last month's payroll job loss number of -190,000 has been revised down to 111,000. September's nasty -263,000, which had me wondering if the job market had started getting worse again, has been revised down to -139,000. So this month's good news could be revised upward into really good news or downward into disappointment. The trend is looking pretty good but, as Ian Shepherdson of High Frequency Economics writes, "There is no doubt the underlying trend in payrolls is improving, but this looks a bit too fast."

Noam Scheiber also urges caution:

There is one ominous note from today's report, though: Long-term unemployment. Last month I noted that the number of long-term unemployed–people out of work 27 weeks or longer–was increasing at a decreasing rate and looked like it might be about to peak. That was key because, as I explained in this post, a peak in long-term unemployment fairly soon after a recession has historically foreshadowed a "jobful" rather than a "jobless" recovery.

Unfortunately, the number of people unemployed for 27-plus weeks shot up again pretty sharply last month: up 293,000 versus only 156,000 in October. That could obviously be a one-off blip. But if not, and if it means what it's historically meant, it could be a while before we start seeing real job growth.

Progressive Taxes Worsen Inequality?, Ctd

A reader writes:

Felix Salmon’s counter intuitive thought regarding progressive tax rates is an interesting theory, but does nor correlate with the facts. In 1963, the top marginal tax rate in the US was 93%. Since then, it has been almost steadily lowered, till today where it stands at 35% (there was a brief period in the late 80s when it went down to 28%. Yet in this time frame, income inequality has consistently grown:

“In 2005, the top 1 percent claimed 22 percent of the national income, while the top 10 percent took half of the total income, the largest share since 1928.”

“The highest incomes come from executive pay at top corporations. In 2007, the ratio of CEO pay to the average paycheck was 344 to 1, lower than the record 525 to 1 ratio set in 2001, but substantial. …. In the '60s, '70s and '80s, the average ratio fluctuated between 30 and 40 to 1”

So, it would appear that Salmon’s argument is exactly wrong. Lower marginal tax rates over the past 40 years have produced more income inequality.

Another reader adds:

I was struck by a thought while reading that post – namely that it would appear that Salmon is operating under the assumption that the government is in and of itself a corporation-like entity, and, as a result, behaves as such.

To clarify, it is assumed that corporations act in their own interest to maximize profits, but the mechanism of this action isn’t a function of the corporation as a discrete entity, but rather of the individuals (shareholders, board members, etc.) responsible for making those decisions. Because those individuals seek to increase their own personal wealth, and that of their company, they set corporate policies that increase net profits.

Government does not operate in this manner. The goal of government (and those to govern) is not to achieve maximal profits, but rather to serve and protect its citizenry. Yes, there is a great deal of pressure leading legislators to enrich donors or particular industries, and beyond that, increased tax revenue can enable more expansive (and expensive) projects, but government is not a for-profit entity and faces different incentives. This is in part because the individuals setting tax policy do not have the same kinds of incentives as those setting corporate policy in that they do not see their individual wealth affected by increased tax revenue – indeed, many legislators are incentivized against progressive taxation as such policies can make wealthy individuals less inclined to donate to politicians.

Yes, if you have a progressive system of taxation, it creates incentives for government to increase the wealth of those most highly taxed and thus inequality. But government, not being an autonomous, sentient entity, has no way to work towards those incentives unless those in congress share them, and I’m not convinced that they do.

Rebound?

Trumpeting the new jobs numbers, Floyd Norris thinks that "the bad days for jobs are very close to being over, and that this will not be a jobless recovery":

One reason is the sheer abruptness of the decline in employment during the recent recession. (Yes, I think it is over.) After Lehman Brothers failed, the unemployment rate rose at a faster clip than at any time since 1975. There was something approaching panic among employers. They feared sales would collapse and that credit would be unavailable. In that spirit, they cut every cost they could. Imports plunged because no one wanted to add inventory. Ad spending collapsed. And people were fired.

That has left many companies in a position where they may need to add workers quickly for even a small increase in business.

Call me the optimist.

Batons Without Borders

The WSJ reports that the Iranian regime is monitoring and threatening its global diaspora through online portals such as Twitter and YouTube. Here is one story of many:

His first impulse was to dismiss the ominous email as a prank, says a young Iranian-American named Koosha. It warned the 29-year-old engineering student that his relatives in Tehran would be harmed if he didn't stop criticizing Iran on Facebook. Two days later, his mom called. Security agents had arrested his father in his home in Tehran and threatened him by saying his son could no longer safely return to Iran. "When they arrested my father, I realized the email was no joke," said Koosha, who asked that his full name not be used.

Bottoming Out?

EmploymentPercentJobLossesNov

Calculated Risk has the graph. Leonhardt explains the significance:

The economy lost only 11,000 jobs in November, the Labor Department reported. That’s down from 111,000 last month and a peak of 741,000 in January. Economists had been expecting a loss of more than 100,000 in November…How much should we make of one month’s report? It’s probably best to be conservative. I’d be surprised if this rate of progress continues in coming months. But this is still very good news: many fewer people were out of work last month than expected.

Christianist Watch

"Now, after someone dies and someone comes in and steals from them, we consider that in most society reprehensible. … But when the government comes in, because we have the power to pass laws and legalize theft that otherwise would be considered reprehensible, it’s okay. But it is not okay. … Jesus never advocated the government go steal. He said ‘you do it. Do it with your own money, don’t steal it from somebody else.’ And that is why this should not pass," – Congressman Louie Gohmert (R-TX), opposing a 45% tax on estates valued at more than $3.5 million ($7 million for a couple).

I seem to recall Jesus urging his followers to pay Caesar what was due to him – and never to confuse that with anything to do with God. I also seem to recall his saying quite clearly that only by giving away one's entire wealth to the poor could one enter the kingdom of heaven.

Dissent Of The Day

A reader writes:

Can you tell me how you know that the Israeli settlement freeze is "meant to make Israel look less intransigent than it actually is," instead of making Israel actually less intransigent? I think it is again quite imperious of you to conclude that an action taken at the behest of the international community, and the United States specifically, is actually just a ploy. In the future it may well prove to be that way, but that you know that now displays quite a bias in your writing.

It seems absurd to me that you, a) want Israel to stop settlement construction, and b) criticize their halt of settlement construction as a ploy for the "future total annexation." Was them the Israeli pull out of Lebanon merely a ploy to annex southern Lebanon at some point in the future? Was the disengagement from Gaza a similarly devious plan? And do you really think that Netanyahu does not want peace?

While you may disagree with him about what that peace looks like or the best way to get there, how can you say he wants permanent war? Was your brother killed in a battle? You supported war in Iraq and Afghanistan after one terrorist attack in the United States. Maybe he is more skeptical of how to get to a peace agreement because his family, friends and neighbours have fought in numerous wars, been kidnapped, and had bombs, somewhat regularly, explode in their streets. For you to say that his goal is, "the expansion of Israel in a forever war funded in large part by the US," is not proven by the evidence you cite.

The facts remain that Israel outright refused to freeze all its settlement activity as requested by the US, and indeed continued building  settlements in East Jerusalem, thus ensuring the still-birth of the peace process under Obama. In the month before Obama took office, it is also true that the Israeli government pulverized the Gaza ghetto with immense and unrelenting war, killing hundreds of innocents and polarizing the region in ways that made Obama's task all but impossible – and strengthened Hamas. The news from yesterday was that Netanyahu has now stated that even his temporary and incomplete freeze will end soon, after which, in his words, "we will continue to build."

In my judgment, these are not the actions of a government seeking peace or trying to work things out constructively with an ally. And when you look back and see the constant building and settlement in the West Bank, uninterrupted for two decades, you see that there is no way Israel will ever give this land up, and has no sense of how humiliating and provocative this policy is to the people it needs to negotiate a future with. Yes, of course, the Palestinians have hardly been able or united negotiating partners in this. But they are the ones now disenfranchised from any stable home, and powerless in the face of the bulldozers and the construction workers and the roadblocks. Even with a giant wall, the settlements continue far beyond its reach. I'm tired of pretending this isn't happening.

If they don't want to annex the West Bank, they can stop colonizing it. When they colonizing it, as Obama has requested, I'll believe their good intentions for peace.

Leaving the Right, Ctd

A reader writes:

I agree with your reasoning in Leaving the Right, but I am confused as to what you have just left.  It forces me to question whether the terms we use to describe ourselves and our beliefs are losing their distinctions?  If the right is synonymous with Republican, then I think you walked away many years ago, like myself.  But I certainly hope that there is still a distinction between the words conservative and Republican, since I have always referred to myself as the former, and attacked the entirely non-conservative policies of latter.

Do you think that individuals like Bush and Palin, or entire movements like Christian fundamentalism and neo-conservatism, have co-opted the term conservative as well?  If we say that the conservative movement has left us, have we not conceded the term to its modern twisted definition?  And if so then I have to ask what are we?  And what are we entering on our way out?

There's been some confusion here, probably because of the title of the post. The only person who just announced a break with the conservative movement is Charles Johnson. My own spur-of-the-moment manifesto was merely inspired by his. And quite obviously, as I explained in the post, I left that movement many years ago, in so far as I was ever a part of it. (Which "movement conservative" backed Clinton in 1993 and Kerry in 2004, as I did?)

But as I quixotically insisted in The Conservative Soul, I refuse to give up the term 'conservative' and any fair-minded reader of that book would understand why.

I continue to call myself a conservative, of the tradition of Burke and Hume and Montaigne and Oakeshott. I suspect that all four of them would regard the term "conservative movement" an oxymoron anyway, as I do, even if they understood it at all. And although I have deep respect for the liberal tradition, I am much too much a skeptic, and an individualist, and an anti-collectivist to join the Democrats. I try to join as few organizations as I can get away with. And I lived under socialism so know how poisonous it can be.

So my reader and I remain conservatives without a home. That happens in life and politics. Perhaps one day the GOP will return to its saner, calmer roots, and we can feel more comfortable supporting them from time to time. But I suspect that the fundamentalist and neocon take-over will prevent that any time soon. So we carry on without a home but with an argument and a tradition instead. Good enough for me.

Moreover, conservatives of the sort I describe should not be dismayed by the lack of a party. It may even increase our leverage to hover between the two, goading each toward the center-right in the long run, while tolerating various adjustments in response to changing circumstances all the while. And it's certainly more symptomatically conservative not to get too attached to any political party. In fact, factionalism and partisanship has helped destroy conservatism in America almost as much as religion. Burke, one recalls, was not a Tory but a Whig. Churchill was a Liberal as well as a Tory. Reagan began life as a Democrat.

The point of conservatism, you see, is not political. Real conservatives get involved in politics because they have to, not because they want to. And they have to to rectify obvious disasters or utpoian assaults on freedom or radical attacks on established modes and orders. We are conservative in politics in part to restrict the claims of politics and to enlarge the claims of life.

So cheer up. I certainly feel less gloomy about America than I did two years ago, and confident that the good sense of its silent center will navigate the treacherous waters ahead. Yes, America is in much worse shape today than a decade ago – but some of that is the dispelling of illusions, the pricking of bubbles and the consequence of hubris. This will not deflate the conservative. There is always something bracing about rediscovering reality, however grim the disillusionment may be. For conservatism begins in a lack of illusions and builds from there.

The GOP Will Thank Ted Olson?

Jeb Golinkin argues:

If [Ted Olson and David Boies] were to succeed in showing the California ban to be what it is, an unconstitutional law that is, in Olson’s words, “utterly without justification” and that brands gays and lesbians as “second-class and unworthy” in the eyes of the law, Republicans will owe the two a debt of gratitude for saving the party from twenty years of supporting a position that 20 years from now men and women will view as utterly abominable.  Not only will they save us from the eyes of history, they will save us from the electoral losses that the public’s general condemnation of the position will turn into at some point.