The NYT has an article discussing the ways in which Mick Mulvaney is changing the Consumer Financial Protection Bureau in his capacity as an acting director. There is one item on which it is somewhat misleading. The piece indicates that Mulvaney’s status as an acting director is an accident, telling readers that Trump could appoint a new director, but the confirmation process could take months.
While confirmation can be lengthy, depending on the quality of the nominee (Republicans do control the process), Trump has obviously made a decision not to put up a nominee for the directorship. Cordray’s decision to resign before his term ended was widely expected. Most administrations would already have a candidate in mind whose name could be submitted as soon as the resignation was announced. However, a nominee for director would be subject to various disclosure requirements and would also have to testify before the Senate. After being approved the director could only be removed for cause.
By contrast, an acting director is not required to make the same sorts of disclosures, nor do they have to demonstrate their competence to the Senate. Also, the acting director serves entirely at the will of the president. Trump can remove Mulvaney any time he chooses for any reason whatsoever.
Trump has followed a similar path with the position of the Comptroller of the Currency and the Commissioner of the Internal Revenue Service. In each case, he has an acting head of agencies that are supposed to operate in a non-political manner. As with Mulvaney, Trump has the ability to remove these heads any time he chooses.
This abuse of the appointment process has received little attention. It threatens the integrity of all three agencies.
The NYT has an article discussing the ways in which Mick Mulvaney is changing the Consumer Financial Protection Bureau in his capacity as an acting director. There is one item on which it is somewhat misleading. The piece indicates that Mulvaney’s status as an acting director is an accident, telling readers that Trump could appoint a new director, but the confirmation process could take months.
While confirmation can be lengthy, depending on the quality of the nominee (Republicans do control the process), Trump has obviously made a decision not to put up a nominee for the directorship. Cordray’s decision to resign before his term ended was widely expected. Most administrations would already have a candidate in mind whose name could be submitted as soon as the resignation was announced. However, a nominee for director would be subject to various disclosure requirements and would also have to testify before the Senate. After being approved the director could only be removed for cause.
By contrast, an acting director is not required to make the same sorts of disclosures, nor do they have to demonstrate their competence to the Senate. Also, the acting director serves entirely at the will of the president. Trump can remove Mulvaney any time he chooses for any reason whatsoever.
Trump has followed a similar path with the position of the Comptroller of the Currency and the Commissioner of the Internal Revenue Service. In each case, he has an acting head of agencies that are supposed to operate in a non-political manner. As with Mulvaney, Trump has the ability to remove these heads any time he chooses.
This abuse of the appointment process has received little attention. It threatens the integrity of all three agencies.
Read More Leer más Join the discussion Participa en la discusión
Ross Douthat goes over what he sees as the good and the bad in the Republican tax plans in his column today. He notes the ending of the mandate that people buy health care insurance in the Senate version of the bill and then says:
“In the long run any universal health insurance system will be on a firmer political footing if it finds a way to work without requiring people to buy a product they don’t want.”
A “universal” system does mean that everyone has to have health insurance even if they don’t want it. It is possible to effectively make people “buy” insurance through the back door if it is paid for with tax revenue. In this case, people pay for their premiums through their taxes, but they don’t directly “buy” insurance.
It’s possible that Douthat is arguing for some Medicare for All type system, but it’s also possible that he doesn’t really want a universal health care system.
Thanks to Robert Salzberg for calling this to my attention.
Ross Douthat goes over what he sees as the good and the bad in the Republican tax plans in his column today. He notes the ending of the mandate that people buy health care insurance in the Senate version of the bill and then says:
“In the long run any universal health insurance system will be on a firmer political footing if it finds a way to work without requiring people to buy a product they don’t want.”
A “universal” system does mean that everyone has to have health insurance even if they don’t want it. It is possible to effectively make people “buy” insurance through the back door if it is paid for with tax revenue. In this case, people pay for their premiums through their taxes, but they don’t directly “buy” insurance.
It’s possible that Douthat is arguing for some Medicare for All type system, but it’s also possible that he doesn’t really want a universal health care system.
Thanks to Robert Salzberg for calling this to my attention.
Read More Leer más Join the discussion Participa en la discusión
That could have been the headline, at least if the New York Times article reporting on the action is accurate. The NYT told readers that when Clinton first created the Grand Staircase National Monument in 1996:
“When Mr. Clinton formed Grand Staircase, the move halted plans for a coal mining project there that would have brought desperately needed jobs to a poor county.”
Since the demand for coal is not hugely elastic, if coal was being mined from the area that became the monument, it would have largely displaced coal that was being mined elsewhere in the United States. As it was, employment in the coal industry fell from roughly 90,000 in 1996 (0.08 percent of total employment) to 52,000 in the most recent data (0.03 percent of total employment). The decline in employment in areas now producing coal would have been even sharper if the Grand Staircase had been open to mining, according to the NYT.
That could have been the headline, at least if the New York Times article reporting on the action is accurate. The NYT told readers that when Clinton first created the Grand Staircase National Monument in 1996:
“When Mr. Clinton formed Grand Staircase, the move halted plans for a coal mining project there that would have brought desperately needed jobs to a poor county.”
Since the demand for coal is not hugely elastic, if coal was being mined from the area that became the monument, it would have largely displaced coal that was being mined elsewhere in the United States. As it was, employment in the coal industry fell from roughly 90,000 in 1996 (0.08 percent of total employment) to 52,000 in the most recent data (0.03 percent of total employment). The decline in employment in areas now producing coal would have been even sharper if the Grand Staircase had been open to mining, according to the NYT.
Read More Leer más Join the discussion Participa en la discusión
Robert Samuelson used his column today to say he doesn’t understand budget deficits. This is hardly a surprise to regular readers of his column. But, he bizarrely argues that because he is confused, everyone else is also.
Samuelson tells readers:
“The truth is that we don’t fully understand the effects of budget deficits on the business cycle.”
No, “we” do understand the effects of budget deficits. It really is pretty simple, deficits increase demand compared to a balanced budget or surplus. Of course, not all spending or taxes are equal. Direct spending on goods and services has more impact than transfer payments, and transfer payments have more impact on demand if they go to lower income people who will spend them than higher income people who save much of their income. The same is true of taxes.
Also, it is important to note that the budget only captures a portion of the government’s commitments of revenue. Government-granted patent and copyright monopolies can easily involve a commitment in excess of $1 trillion a year (4–6 percent of GDP) in payments for rents. These are effectively privately collected taxes.
Anyhow, it’s unfortunate that Samuelson is confused on this issue. It is even more unfortunate that the Post could not find an economic columnist who understands economics.
Robert Samuelson used his column today to say he doesn’t understand budget deficits. This is hardly a surprise to regular readers of his column. But, he bizarrely argues that because he is confused, everyone else is also.
Samuelson tells readers:
“The truth is that we don’t fully understand the effects of budget deficits on the business cycle.”
No, “we” do understand the effects of budget deficits. It really is pretty simple, deficits increase demand compared to a balanced budget or surplus. Of course, not all spending or taxes are equal. Direct spending on goods and services has more impact than transfer payments, and transfer payments have more impact on demand if they go to lower income people who will spend them than higher income people who save much of their income. The same is true of taxes.
Also, it is important to note that the budget only captures a portion of the government’s commitments of revenue. Government-granted patent and copyright monopolies can easily involve a commitment in excess of $1 trillion a year (4–6 percent of GDP) in payments for rents. These are effectively privately collected taxes.
Anyhow, it’s unfortunate that Samuelson is confused on this issue. It is even more unfortunate that the Post could not find an economic columnist who understands economics.
Read More Leer más Join the discussion Participa en la discusión
Read More Leer más Join the discussion Participa en la discusión
Sure, Republicans say this, but did we think that they would say that they expect their tax plan to increase the debt by $1.5 trillion, but rich people need tax cuts? Given their endless tirades about deficits under President Obama, Republicans are pretty much required to say that their tax cuts will pay for themselves regardless of what they actually believe.
So why don’t we recognize this very simple fact and stop telling people what Republicans believe, as this NYT article does?
“But the bill’s passage was made possible by a near-complete Republican embrace of the idea that about $1.5 trillion of tax cuts will pay for themselves, by producing enough economic growth and additional federal revenue to offset their costs to the Treasury.
“That belief was contradicted by several studies, including one from Congress’s official economic scorekeeper, which Republicans dismissed as overly pessimistic.”
The NYT’s reporters have no idea what Republican members of Congress believe about the fiscal impact of their tax cut, so they should not be implying that they do. As a practical matter, they may have no beliefs on the issue whatsoever. They get and keep their jobs by doing what their donors want them to do, not by thinking about the economic impact of the bills they pass.
Sure, Republicans say this, but did we think that they would say that they expect their tax plan to increase the debt by $1.5 trillion, but rich people need tax cuts? Given their endless tirades about deficits under President Obama, Republicans are pretty much required to say that their tax cuts will pay for themselves regardless of what they actually believe.
So why don’t we recognize this very simple fact and stop telling people what Republicans believe, as this NYT article does?
“But the bill’s passage was made possible by a near-complete Republican embrace of the idea that about $1.5 trillion of tax cuts will pay for themselves, by producing enough economic growth and additional federal revenue to offset their costs to the Treasury.
“That belief was contradicted by several studies, including one from Congress’s official economic scorekeeper, which Republicans dismissed as overly pessimistic.”
The NYT’s reporters have no idea what Republican members of Congress believe about the fiscal impact of their tax cut, so they should not be implying that they do. As a practical matter, they may have no beliefs on the issue whatsoever. They get and keep their jobs by doing what their donors want them to do, not by thinking about the economic impact of the bills they pass.
Read More Leer más Join the discussion Participa en la discusión
On Morning Edition yesterday, Representative Jeb Hensarling, the chair of the House Financial Services Committee, was interviewed by David Greene. At one point, Greene asked him about the Republican tax cut proposal. After blaming President Obama for the slow growth of the last eight years, Hensarling commented:
“Every time we’ve had a pro-growth fundamental tax reform, be it under President Reagan, President Kennedy — you can even go all the way back to President Coolidge. We have seen paychecks increase, economic growth be ignited and actually more revenues come into the government.”
It would have been helpful for Greene to have corrected Hensarling here. We had a big tax cut that was sold as “pro-growth” under President George W. Bush. This was not followed by strong growth and, in fact, the recovery following the tax cuts ended with the collapse of the housing bubble that gave us the Great Recession. This was the basis for the weak growth that Hensarling was complaining about in his prior comment.
The strongest period of growth since the 1960s followed a tax increase put in place by the Clinton administration in 1993. While it is not plausible to attribute this growth to the tax increase, obviously it did not prevent the growth.
It would have been helpful to point these facts out to listeners, some of whom might have been misled into believing Hensarling’s claims.
On Morning Edition yesterday, Representative Jeb Hensarling, the chair of the House Financial Services Committee, was interviewed by David Greene. At one point, Greene asked him about the Republican tax cut proposal. After blaming President Obama for the slow growth of the last eight years, Hensarling commented:
“Every time we’ve had a pro-growth fundamental tax reform, be it under President Reagan, President Kennedy — you can even go all the way back to President Coolidge. We have seen paychecks increase, economic growth be ignited and actually more revenues come into the government.”
It would have been helpful for Greene to have corrected Hensarling here. We had a big tax cut that was sold as “pro-growth” under President George W. Bush. This was not followed by strong growth and, in fact, the recovery following the tax cuts ended with the collapse of the housing bubble that gave us the Great Recession. This was the basis for the weak growth that Hensarling was complaining about in his prior comment.
The strongest period of growth since the 1960s followed a tax increase put in place by the Clinton administration in 1993. While it is not plausible to attribute this growth to the tax increase, obviously it did not prevent the growth.
It would have been helpful to point these facts out to listeners, some of whom might have been misled into believing Hensarling’s claims.
Read More Leer más Join the discussion Participa en la discusión
The Republicans had planned to include a trigger mechanism in their tax plan, which would have automatically raised taxes in the event of budget deficits that exceeded targets. This is classically bad economic policy. It means that if growth slows and the economy falls into a recession, the government would be raising taxes. Such a tax increase when the economy is already slowing would further dampen growth, making a downturn worse.
This is very basic economics. The fact that the Republicans were prepared to include it in their bill indicates that they either have very little knowledge of economics or they don’t care about the economic impact of their tax plan. It would have been helpful if the media had highlighted this issue since it offers considerable insight into how the Republican leadership is thinking about this tax plan.
The Republicans had planned to include a trigger mechanism in their tax plan, which would have automatically raised taxes in the event of budget deficits that exceeded targets. This is classically bad economic policy. It means that if growth slows and the economy falls into a recession, the government would be raising taxes. Such a tax increase when the economy is already slowing would further dampen growth, making a downturn worse.
This is very basic economics. The fact that the Republicans were prepared to include it in their bill indicates that they either have very little knowledge of economics or they don’t care about the economic impact of their tax plan. It would have been helpful if the media had highlighted this issue since it offers considerable insight into how the Republican leadership is thinking about this tax plan.
Read More Leer más Join the discussion Participa en la discusión
When the Washington Post advertises for reporters, do they include “mind reading skills” as a necessary qualification? They gave us yet another example of these skills in an article discussing Republican efforts to craft a tax bill that will be able to get the support of 50 senators.
The piece told readers:
“Many Republicans believe the economic growth that will be unleashed by the tax cuts will be worth it, potentially creating such an economic boom that new revenue will come in from job creation and corporate investment.”
It’s good the Post’s reporters have this mind reading ability. The rest of us might just think that Republicans are saying utter nonsense about tax cuts and economic growth because, at least publicly, they can’t just say “we are trying to give more money to our wealthy campaign contributors.” This is, of course, what they are in fact doing, so some of us might think it is what they intend to do.
When the Washington Post advertises for reporters, do they include “mind reading skills” as a necessary qualification? They gave us yet another example of these skills in an article discussing Republican efforts to craft a tax bill that will be able to get the support of 50 senators.
The piece told readers:
“Many Republicans believe the economic growth that will be unleashed by the tax cuts will be worth it, potentially creating such an economic boom that new revenue will come in from job creation and corporate investment.”
It’s good the Post’s reporters have this mind reading ability. The rest of us might just think that Republicans are saying utter nonsense about tax cuts and economic growth because, at least publicly, they can’t just say “we are trying to give more money to our wealthy campaign contributors.” This is, of course, what they are in fact doing, so some of us might think it is what they intend to do.
Read More Leer más Join the discussion Participa en la discusión
One of the issues that has been raised in the debate over tax cuts is how fast the economy can grow. The Congressional Budget Office (CBO) is projecting growth averaging just 1.9 percent annually over the next decade. This is based on the assumption that the labor force will grow on average by 0.5 percent annually and productivity will grow by 1.4 percent.
By contrast, the Trump administration is arguing that with its tax plan the economy can grow 3.0–4.0 percent annually. It appears that the consulting firm McKinsey Global Institute agrees with the Trump administration’s projections on growth, but not due to its tax plan.
The Washington Post reported on a new study from McKinsey which projects that one third of all jobs in the United States will be lost due to robots and artificial intelligence by 2030. This rate of job loss translates into an annual rate of productivity growth of 3.1 percent, roughly the same pace of growth seen during the 1947 to 1973 Golden Age and the period from 1995 to 2005.
If the economy actually sees the productivity growth predicted by McKinsey and the CBO labor market projections prove accurate, then growth should average a bit more than 3.5 percent over the next decade. If this is the case, workers should receive much larger wage increases than they have had in recent decades. Also, the more rapid growth should mean much smaller budget deficits.
It is important to note that the McKinsey report is effectively a baseline projection. It is saying that growth will be considerably faster than is now projected by CBO assuming no change in policy, including no large tax cuts. In fact, if the McKinsey report is correct, it is difficult to see the rationale for tax cuts that predominantly benefit the richest people in the country.
One of the issues that has been raised in the debate over tax cuts is how fast the economy can grow. The Congressional Budget Office (CBO) is projecting growth averaging just 1.9 percent annually over the next decade. This is based on the assumption that the labor force will grow on average by 0.5 percent annually and productivity will grow by 1.4 percent.
By contrast, the Trump administration is arguing that with its tax plan the economy can grow 3.0–4.0 percent annually. It appears that the consulting firm McKinsey Global Institute agrees with the Trump administration’s projections on growth, but not due to its tax plan.
The Washington Post reported on a new study from McKinsey which projects that one third of all jobs in the United States will be lost due to robots and artificial intelligence by 2030. This rate of job loss translates into an annual rate of productivity growth of 3.1 percent, roughly the same pace of growth seen during the 1947 to 1973 Golden Age and the period from 1995 to 2005.
If the economy actually sees the productivity growth predicted by McKinsey and the CBO labor market projections prove accurate, then growth should average a bit more than 3.5 percent over the next decade. If this is the case, workers should receive much larger wage increases than they have had in recent decades. Also, the more rapid growth should mean much smaller budget deficits.
It is important to note that the McKinsey report is effectively a baseline projection. It is saying that growth will be considerably faster than is now projected by CBO assuming no change in policy, including no large tax cuts. In fact, if the McKinsey report is correct, it is difficult to see the rationale for tax cuts that predominantly benefit the richest people in the country.
Read More Leer más Join the discussion Participa en la discusión
