Here’s some of the interesting content that EPI’s research team browsed through today:

• “Nonpartisan Tax Report Withdrawn After GOP Protest” (New York Times)
• “With paychecks, size matters” (Los Angeles Times)
• “Mexico is now a top producer of engineers, but where are jobs?” (Washington Post)
• “Wary of Future, Professionals Leave China in Record Numbers” (New York Times)

Suzy Khimm wrote an excellent post (during a hurricane, no less) earlier this week on the incoherence of those screaming about the alleged dangers of mounting public debt while also fretting about the “fiscal cliff.” To reiterate her point and be very clear (again) on this: The danger of going over the “fiscal cliff” (bad metaphor, by the way) is that budget deficits will fall, not rise, too quickly. This is very confusing to far too many economic commentators and policymakers because they have been trained to a near-Pavlovian degree to think the federal budget deficit is always too high and rising too quickly.

FULL ANALYSIS FROM EPI: Budget battles in the lame duck and beyond

This failure to realize that there should be much more to consider when making fiscal policy than “deficit BAD” has been a big problem in dealing with the Great Recession and its aftermath (see this blog post for an extended take on this).

So, I applaud Khimm’s campaign to spread the word that if you’re worrying about the “fiscal cliff,” then you’re a Keynesian, period. Read more

Here’s some thought-provoking content that EPI’s research team enjoyed reading today:

• “A Big Storm Requires Big Government” (New York Times)
• “Mitt Romney’s voodoo spending cuts” (Wonkblog)
• “Scoop Dupes” (Paul Krugman)

President Obama and Secretary of Education Arne Duncan claim that the poor achievement of African-American students is the “civil rights issue of our time.” Yet there is little chance that the achievement gap between white and black students will be narrowed significantly, as long as large numbers of disadvantaged children are concentrated in racially segregated and economically bereft urban neighborhoods. In these (to use William Julius Wilson’s term) “truly disadvantaged” neighborhoods, teachers are overwhelmed by the impediments to learning that children bring to school, and that reinforce each other in racially and economically isolated classrooms. None of this can change substantially until metropolitan areas are residentially desegregated.

An investigation by Nikole Hannah-Jones for ProPublica, “Living Apart: How the Government Betrayed a Landmark Civil Rights Law,” published this week, demonstrates that the Obama administration and its predecessors have done little to promote residential integration.

Specifically, Hannah-Jones exposes the contempt with which the federal government, for 45 years, has ignored its obligation under the 1968 Fair Housing Act to “affirmatively further” the goal of racial desegregation. Read more

A recent blog post by the Heritage Foundation’s Derek Scissors claims that my estimates of the number of jobs lost due to growing trade deficits with China “are demonstrably wrong.” Scissors then fails to demonstrate how they’re wrong.

That’s because he can’t. The economic models used in our report (Scott 2012, 9, Appendix and note 15) are the gold standard for research on the employment effects of trade, and “all but identical models” have been used in similar studies by the Federal Reserve Bank of New York, by Martin Bailey and Robert Lawrence of the Brookings Institution, and in a U.S. Commerce Department study that represents the work of more than 20 government economists including the chief economists from that agency and the Office of the U.S. Trade Representative.

At its core, our model is based on a straightforward application of Keynesian economics and national income accounting, which show that exports stimulate the domestic economy while imports reduce demand for domestic products. Scissors (and many others before him, such as Dan Griswold at Cato and the U.S. China Business Council) claims that imports are good for the economy, in part because they are correlated with growth. But this assertion ignores two fundamental questionsRead more

It’s hard to improve upon Dean Baker’s response to Robert Samuelson’s deeply confused column about government jobs, but I’ll just add briefly here.

It’s entirely clear that the whole discussion over “government creating jobs” sparked by President Obama’s closing statement in the second presidential debate is really about the role of public-sector hiring or cutbacks as something that either cushions or exacerbates the current problem of chronically high unemployment rates.

This debate just can’t be about anything else, because it would just be too silly. And it surely can’t really be about what Samuelson spends most of his column doing: wondering whether or not government jobs are really jobs.

Government jobs are jobs, period. Nothing about the fact that they require “money to support [them]” or that public hiring can lead to “substituting public-sector workers for private-sector workers” changes this. As Baker notes, private-sector jobs “require money” to support them, and, there are plenty of times when rising private employment in one sector drives declining private employment in another. This all just seems too obvious to need pointing out.

No, the issue is whether or not cutbacks to public-sector employment when the economy has lots of productive slack lead to net economy-wide job loss, and just how much. The answers to this are “they do,” and, “a lot.” Around 2.3 million is our estimate, cited by the New York Times.

Samuelson notes that government spending during times of economic slumps can boost net job creation, but then notes that the idea of fiscal stimulus is “fiercely debated” and says he doesn’t “intend to settle this debate either.”

That’s too bad, and I wonder why not? After all, that particular debate (i.e., is contractionary fiscal policy really contractionary?) really isn’t particularly hard.

But then again, I didn’t think that it was so hard to recognize what a “job” is, either.

The impact of each presidential election on the makeup of the Supreme Court receives plenty of media attention and is analyzed extensively by experts and court watchers—and deservedly so. During the vice presidential debate, Vice President Biden predicted that the next president is likely to appoint “one or two” justices to the nation’s highest court. Although this prediction may have spooked a few of the Supreme Court justices, given that they would either have to die or retire to open a seat on the court, the election’s impact on the judiciary is a crucial consideration. Lifetime appointments for Supreme Court nominees mean they are sometimes the most enduring legacy of a president’s administration. Given that the Supreme Court is currently comprised of five conservative and four moderately progressive justices, the next administration could realistically tip the ideological balance of the court.

Some of the Supreme Court’s decisions in the past few terms, on Citizens United, the Affordable Care Act, and Arizona’s SB1070 immigration law, for example, were monumental decisions that will impact the everyday lives of citizens, and even the framework of American democracy. But the mainstream media, for the most part, have paid little attention to the potential impact of the election on federal regulationsRead more

Here’s some reading material for you from items EPI’s research team skimmed through today:

• “More People Eschew Jobless Benefits Than Scam System” (Wall Street Journal)
• “Protecting the Child Tax Credit at the Fiscal Cliff” (TaxVox)
• “Starting salaries: How can women catch up with the guys?” (Washington Post)
• “The Dark Side of Bipartisanship” (New York Times)

Here’s a sampling of links that EPI’s research team found insightful today:

• “The Ten Biggest Differences between the Romney and Obama Tax Plans” (TaxVox)
• “The Economic Consequences of Mr. Osborne” (Paul Krugman)
• “Labor unions, liberal groups fear lame-duck betrayal by Obama” (The Hill)
• “Americans don’t want ‘grand bargain’” (Politico)
• “Report Details Massive Chemical Investments in Lobbying and Campaigns” (ENews Park Forest)

My colleague Josh Bivens and I recently published a briefing paper analyzing the near-term macroeconomic impacts of the Obama and Romney budget proposals based on prevailing actionable evidence. (Short summary of findings here.) Our verdict was that Obama’s budget plans would lead to increased employment of 1.1 million jobs in 2013, relative to current policy, whereas Romney’s proposals would lead to small job gains of 87,000 in 2013 if all his proposed tax cuts were deficit-financed, but lead to job losses of 608,000 in 2013 if only some of his tax cuts were deficit-financed.

This latter estimate assumed Romney’s proposed 20 percent reduction in individual income tax rates and alternative minimum tax (AMT) elimination would be revenue-neutral, whereas his earlier proposals—notably cutting the corporate tax rate and eliminating the corporate AMT, taxes on foreign profits, the estate tax, and Affordable Care Act taxes—would be deficit-financed. While regressive tax cuts are really inefficient at boosting growth, enough money plowed into inefficient tax cuts will modestly boost demand and, short of “base-broadening,” (none of which has been concretely specified) Romney is proposing a lot of costly tax cuts. Read more